Welcome to the Public Accounts Committee on Monday 20 April 2026. National museums and galleries are among the country’s most visited free attractions and play a vital role in preserving national collections and supporting education and research. The 15 Government-sponsored museums and galleries that we will discuss today received £484 million in Government grant in aid in 2024-25 from the sponsoring Department, DCMS. Those institutions are operated in an increasingly fragile financial environment. Since the covid-19 pandemic, there has been a real terms reduction in the level of Government funding against the backdrop of rising energy and maintenance costs. In response, museums and galleries have worked hard to increase commercial activity and diversify income, with self-generated income reaching £563 million in 2024-25. Those income streams, however, can be vulnerable to wider economic conditions and visitor numbers, which have not returned to pre-pandemic levels. This session will be an opportunity to understand the current financial position and to examine whether the Government’s funding and oversight arrangements offer value for money for the taxpayer, while safeguarding institutions that are central to the nation’s cultural life. I have to go to a ministerial meeting, so will be leaving the Committee at 4.10 pm, but my very able deputy, Clive Betts, will take over. We will have a short break, as is our normal habit, between the two Chairs. We are delighted to have with us this afternoon the permanent secretary; welcome back again to the Committee, Susannah. Would you like to introduce yourself and say when you took over the role, and then would everybody else like to do the same, please?

I am Susannah Storey. I am the permanent secretary at DCMS. I took over that role in the summer of 2023.

I am Andrew Pattison. I am the chief operating officer at DCMS. I have been doing that role for about a year. I joined the Department in February 2024, so that is just over two years in DCMS.

Rapid promotion—well done. Hannah?

I am Hannah Malik. I am the director for culture and I took over that role in December 2023.

I am Polly Payne, the director general for society, media and culture. I have been in DCMS for a little over five years. I have done a range of jobs, including having been interim perm sec for a little bit, but I have been doing my current job for most of two years.

You are all very welcome, and a particularly warm welcome to Andrew and Hannah, who I think are having their first appearances before the Committee. I hope you will find the experience exacting—shall we say no more than that? I never get feedback on whether the witnesses actually enjoy these Committee hearings or not, or whether they have found them useful or not. One day, perhaps I will. Today is also Ed Pinney’s last meeting with us as Alternate Treasury Officer of Accounts, following his promotion to a role in the Treasury fiscal group. He has been a regular attendee at our meetings for well over a year now, so congratulations on the promotion, Ed. You will be shorn of the duties of having to sit here for hours on end, but no doubt, our paths will cross. You have led major updates on managing public money and changes to accountability frameworks, for which we are grateful, so we wish you well in your new job. To start us off, I will ask the first question. Susannah, how confident are you that the overall financial position of museums and galleries has not deteriorated since 2024-25? Susannah Storey: I want to start by thanking Gareth and his team at the NAO, because we found the Report a helpful overview of how we have been stewarding these very important national assets. We feel that we have tried to strike the right balance. We directly sponsor them and, as you know, provide a lot of their funding. They are freedoms bodies, so they operate at arm’s length, and they have been operating in extremely challenging circumstances. As the Report sets out, we have sought to use the levers available to us, in particular using the spending review to try to make sure we are tilting towards more capital spend, as well as focusing increasingly on the financial resilience of those we thought were most at risk. Since the Report was completed—I am obviously happy to expand on this with the team—we have already started on the work of the recommendations, in particular the work that we are doing this year on our key performance indicators, so that we have a good line of sight to exactly how they are doing. It is still a risky set of issues. You would always expect me, as accounting officer, to be prudent—my glass is often half empty—but I feel that in the circumstances we have been giving very active oversight to these institutions.

We certainly would like to come back to the KPI issue and how you measure things. What is the current financial position of the 15 museums and galleries that you fund? Susannah Storey: I am pleased to say that we are aiming towards publishing the DCMS group accounts before summer this year. I know that that is an issue you have looked into recently with James Bowler and the Treasury team. We will do it with a technical qualification in relation to the local government pension scheme, but that will be the best way of giving an audited overview of both the group position and, in relation to each of the 15, what its own audited outturn is. In terms of current trading, we always get a good line of sight through our interface with the museums and galleries. I am pleased to say that we have very open relationships with them. We have a good line of sight to both qualitative and quantitative metrics. Right now, the financial resilience is not at the level it was at on the risk register, but of course we are very mindful of the fact that the surplus or deficit that drops through is dependent on so many factors, including the visitor numbers and commercial revenue—it is not just the money that we are giving them. The best answer to that will be when we get those reported audited numbers.

We note that the Report says that international visitor numbers in the UK are 13% lower. How does that compare specifically with visitor trends in comparable European countries, such as France, Italy and Spain? I know myself, having visited the Vatican the other day, that even with a pre-booked ticket people still waited an hour and a half. Anecdotally, it looks as though some of the institutions on the continent have more visitors than we do. Is there any definitive answer to that question?

I am going to ask Polly to come in in a minute, because she has been looking at visitor numbers. From our perspective, we were pleased that, as the NAO Report says, while we are not quite back at pre-pandemic levels, the overall visitor numbers—42 million last year—are on an upward trajectory, although, as you say, international visitor numbers to the UK have been slightly lower. I do not have an international benchmark. I do not know whether you do, Polly.

As the NAO stated in para 1.11 of the Report, museums and galleries in Europe had also not returned to their pre-pandemic levels in 2024. It is highly variable, in the same way that our museums and galleries—our 15—are really variable. It is quite hard to bring out any trend data, apart from that everybody is a bit down. What we do know is that, out of the 10 most visited museums and galleries in the entire world, not just Europe—The Art Newspaper has one of the more definitive surveys on this—the British Museum and the Natural History Museum are two out of the top 10. That is for the whole world, including quite a lot now in China, as well as America. International numbers are down, but our museums and galleries are doing reasonably well in those circumstances when it comes to international visitors.

To be absolutely clear for the Committee and for the record, is the top 10 in the world in terms of visitor numbers too?

Yes.

Thank you.

In the latest data, the Natural History Museum got 7.1 million, which is a record for it. As Polly says, it is patchy, in that you cannot assume the same trends for all of them, but we have seen some positives.

As a Department, have you considered whether charging would result in an overall increase in revenue to these museums and galleries or whether a decrease might be caused by a reduction in visitor numbers?

Let me start on that; I saw your comments in the press notice, Chair. Obviously, in the context of the financial resilience of museums and galleries, what we are most interested in with that lens is the following. What are the things that can drive revenue? How do museums and galleries manage costs? And overall, what position does that put them in? You were talking about international comparators; I too have stood for a long time in a queue to see something at the Louvre, and obviously it is charging. We are pleased that since the NAO Report was concluded, Baroness Hodge has completed her independent review of Arts Council England; just recently the Government put out its response. In that review, she talked about the possibility of charging international visitors, and we have said we will look at the possibility. That is something we want to do with the museums and galleries. It is too early to say—because no decisions have been taken—exactly what it would or would not mean. From a purely financial perspective, it is something we want to explore, but it is one of those things that would have to be done very carefully. I think it is fair to say, for this Government, that certainly the 2001 policy change for free admission has resulted in a lot of engagement with our museums and galleries. The stats that we see on that are really positive, so there are no easy choices. This is something that we will have to be working on, and obviously in due course the Government will give an update on its policy position.

I just want to clarify this remark: there is a lot of positive interaction with galleries. Is that around the world or within the UK?

I meant in the UK. Since free museum entry in 2001, we can certainly see that the visitor numbers, the 42 million people—I think our official stats normally show that something like 41% or 42% of adults in this country are physically going to museums and galleries, so we know that it is something that is important in that sense. That was a part of the policy, I think, back in 2001.

Good afternoon. I am going to ask a few questions about DCMS oversight. First, Ms Storey, you mentioned the work that you have started to do on performance indicators, but could you tell us a little about why you have not had the opportunity to establish them yet and how long you think it is going to take to do so?

As the NAO Report sets out really clearly, the core objectives of our 15 national museums and galleries are to preserve the collections and provide free access. Those core objectives are things that we have in their framework agreements, which are the key documents that are public and which set out their obligations and our obligations. And we have published key performance indicators, which the NAO sets out in figure 11 and which have run for a long time series, which is helpful. The baskets of areas they look at are things that we think are important, but as the NAO says, some of them are a bit out of date. For example, one of them talks about website hits. I think we are all wrestling with how AI will change the digital interface with institutions. There is a question the NAO puts about whether we want different sorts of metrics, like operational metrics. When I have looked after portfolios before—there is never a perfect answer. I think everybody wants to be restless in their ambition to improve, and we are absolutely keen to do that. So what we are doing now is some work on the key performance indicators, which will likely look at financial resilience metrics, but also some of the wider metrics around our priority objectives. We hope to have those in place later this year, but they will need to come through all our governance, including to my executive board.

My next question was going to be how long you think it will take to implement them once you have decided on them, but you are suggesting in your answer that probably later this year is the—

Yes. My hope is that we get them agreed. They do need a bit of scrutiny by us to make sure that they are measuring the right things and that they are good ways of measuring those things, because obviously, as we have said—as Polly has said—each of these 15 institutions is really quite different, so if, for example, you looked at percentage increases, you might end up with some quite skewed data. We therefore want to do that during the course of this financial year, so that they will be in place for the ’26-27 financial year.

That’s great. Can you tell me a little about how you will ensure that the new indicators will provide good early-warning signs of deteriorating performance?

I’m sorry, I said ’26-27, but I meant from March ’27—just to correct the record. On good financial indicators, that in a way is the point of good indicators, so that is the thing that we look at in detail. I can give you a flavour, but I do not want to pre-empt the work, although my colleagues might also want to come in. The sorts of things that the NAO sets out well, which we are interested in from a financial resilience perspective, include, first, what each individual museum under its obligations is setting as its unrestricted reserve and whether it is on track with that. We are also going to be interested in trend lines and the underlying things that drive those reserves—in particular, in simple terms, what is happening at the revenue-line level and at the cost-base level, so that we know what is falling through to surpluses or deficits. Those are the core metrics. Then of course we want to look at the trend lines and the materiality. Also, a lot of our internal monitoring and assurance at the moment reflect on whether something repeats as a problem, and those kinds of things give us a good line of sight as to whether we need to have concern. The reason we want to do this with the museums and galleries is because they are freedoms bodies, with their own accounting officers, and their own independent trustees and governance. We are interested to know, too, what are they looking at. As is so often the case, the line of sight that can be most helpful to what is going on is what they tell us, because they are at the frontline of their organisations. Do you want to add something, team?

I am happy to pick up on that. On financial resilience, which is something we are thinking about a lot, there is obviously the published data, but as the Report says, that is quite episodic—the annual report and accounts. I think that our insight and understanding of what is going on with these organisations is good, however, and that is based on regular partnership engagement, which is led by Hannah’s team, but has a lot of support from my financial team as well. That kind of open relationship and the transparency of the data we receive—for example, financial data every month—give us a good relationship and good interaction with them. I think we would be aware of problems through those relationships and through those conversations, but we are seeking some indicators that will support that and give us it in a more systematic way. We have focused a lot in the past few years on financial forecast accuracy, which you are probably aware is a measure that the Treasury has really pushed. Public money has a massive impact on how we run the Government’s overall borrowing requirements and therefore has been very important, but as well as that, we are thinking about what regular information we can collect to give us greater idea of financial resilience.

That’s great, thank you. You, too, have pre-empted my next question in a way. I was going to ask about the transparency of data that you have from those good conversations. Do you know, for example, how many museums and galleries have had to reduce their opening times or cut services in order to get that resilience?

I can talk through what we talk about at our partnership meetings. Partnership meetings are quarterly meetings. They are attended by the accounting officer and the chief financial officer of each museum. On our side, it is the DCMS lead sponsor, usually a senior civil servant, whether me or my deputy director, and the finance business partner from Andrew’s team. We formalise the use of comprehensive management information packs and quarterly risk registers to ensure that our strategic dialogue is driven by robust data. There is a set agenda, and it is the same for each of the museums, but obviously there is a room for them to add specific elements. On that set agenda, we always talk about the KPIs, and it is not just our KPIs, but the KPI performance that they are reporting—on their own KPIs, which they hold—to their board. We ask to see the risk registers that they are reporting to their board, and we talk about the top three risks that they are looking at at the moment. We look at visitor numbers and their commercial revenue, which will often include exhibition performance. They will have forecast what they hope to achieve from exhibitions, and then there is how they are actually performing. All of that provides enormously rich information for us to understand each individual museum, how it is performing and whether we should have any particular concerns. However, as Andrew says, what we hope to do, and what the NAO has pointed out we should be looking at, is to be slightly more systematic in the way we do that, and perhaps pull out those key things and map them across museum to museum.

Do you have an understanding of what level of deterioration in the quality of collections, or opening hours of museums, would be an acceptable tolerance in order to reach that financial balance, or is that not something you are currently considering?

At our partnership meetings, one of the things we discuss is cost-saving measures. We recognise the financial position they are in, and we talk about what cost-saving measures they are looking at. Our priority is always to understand the extent to which that might impact their core objective of making the collection safe and available to the public. In the vast majority of cases, that is also their charitable goal, and their trustees hold them to account for making sure they are meeting those charitable objectives. Those two things are protected almost at all costs; they are their primary purposes. We have not seen any significant concerns on either of those issues.

We are always trying to strike the right balance, recognising that they have their own boards of trustees, and to not stray too deeply into what they might see as their operational metrics. Obviously, if we had a bigger concern, we would, but that is probably the balance, isn’t it?

Yes.

Finally, on opening hours, the Report references instances of museums closing for a day in order to generate private income from use of the space. Do you have a sense of what is an acceptable range? For example, in an extreme case, if it were shut for 363 days a year, would the two days a year that it was open still count as public access and still meet those requirements, or not?

My view is that, in that hypothetical, we would certainly not be happy, and it would not just be us who would not be happy. There would probably be an outcry, not only from the trustees of the institution, but from all the people affected. The sense that I get from the chairs of these institutions—given the scale of them to DCMS, we do spend a lot of time with these people—is that, as Hannah said, they are very focused on their core objectives of preserving these collections and keeping access. I think they would be very mindful of that.

I am going to ask specifically about financial management skills and staffing within these organisations. I want to get your commentary on some bits of the Report. Paragraph 3.17 indicates that “financial management capability can contribute to breaches of financial controls.” I want to talk first about officers at board level. The Report specifically references that financial management capabilities and resources on boards would reduce breaches, but you are not collecting data to assess those capabilities. Has that now been brought to your awareness, and might we see a change in future?

I would never say never about a change in future, but the reason we do not do that at the moment is the point about their own obligations and their autonomy, with the accounting officer responsibility and the freedom to run these institutions in the way they see fit. Andrew might want to come in, but from time to time, when we have had particular concerns or particular focus areas on the financial side, we have certainly given support through our finance team. I think we have sometimes even lent members of staff. We are very actively engaged with them on their financial capability. Something like eight of the 15 institutions have changed finance director since 2022, and I think they are very focused on their financial capability. Also, anecdotally, quite a number of the trustees and chairs have a financial services or financial background. It is an area of focus but, yes, we do not currently monitor it. Is there anything you want to add, Andrew?

Not so much on the board side, but my teams work quite closely with the finance teams within the organisations. When there are new finance directors or CFOs, they will meet with one of my deputy directors—one of my members of the SCS—who will talk them through expectations and ways of working. We have talked before about the importance of partnerships and relationships and establishing that way of working. There is a variety of backgrounds to some of these people. Some of them are well versed in central Government accounting and managing public money. Some of them have come in from the private sector and therefore understanding the world of Government accounting and some of the things that really matter in this environment is important. That is the start of an ongoing relationship with them. Susannah is right that I have lent members of my teams to organisations when they have specifically asked for some senior support. The other area that we work very closely with departmental financial teams on is the production of the annual report and accounts. That is probably the area where there is the most technical expertise, and the way that it is done in Government is slightly different from other sectors. We have worked very closely with them not only to provide training and advice, but on the consolidation packs that they return to us, which allow us to produce the group accounts. There is a bit of a sliding scale: depending on the organisation, we will actually go and help them produce that and make sure that it is right, so that we can get our group accounts right. It also helps with their audit and their preparation of their accounts, on which they are going through their own audit process.

To push back on that, you have just said that you are already supporting these teams very actively. Some organisations will have strong financial resilience internally, but some are already coming to you and borrowing members of your team. You mentioned that eight out of the 15 organisations had a change of chief financial officer. To me, that sounds like a sector that should be under more scrutiny and oversight from DCMS. If they are having to use you now and we have seen a churn of CFOs at a very high rate, surely that suggests a sector that is actually not that resilient, in financial control terms.

On the CFO question, it is right that eight have left, but the seven who are still there—I went back and looked—have been in post since at least April 2019. If you look at that sector—and they do talk and work together—there are a number of people who have been around for a very long time, so there is that experience and support for each other within the sector. It is very risk based, as well. I was describing the intervention that we will do with organisations that ask us for specific help, or where we know that there has been a bit of change of staff and we feel that offering help will do that, but that does not necessarily apply to all of them. The offer is there to all of them, but there are ones that are doing very well with experienced, established teams, and they are almost just cracking on and getting on with it in their own way.

As we established at the beginning, going through covid, as for so many parts of the economy and society, was a huge and difficult event for these institutions, so they have had a lot to wrestle with. I imagine that some of the changes over the past four years to those finance teams, which are executive roles for these institutions, are in the ordinary course. I do not think the fact that, over four years, that number has changed signals anything of itself. As Andrew said, one of the things we are most focused on from our sponsor position is making sure that the accounting officer in each organisation understands their obligation and has the team around them. I do not think we feel at the moment that that, of itself, signals a control issue, but it is certainly something that we keep a close eye on.

Paragraph 1.14 of the Report indicates that the financial resilience of the organisations has significantly worsened since 2025. In addition, paragraph 1.16 indicates that strategic reserves have fallen in the period, and paragraph 2.8 identifies concerns about future costs. I suggest that the sector is showing you a yellow light, with declining reserves and increasing costs despite increasing footfall. Might I suggest that more financial review is required to ensure sustainability? Otherwise, you might discover that problems creep up on you. Let me move on to the risk element. Paragraph 3.23 states that you have been “developing a Strategic Indicator Tool since early 2024” to provide to risk officers. Where are you with that tool, and what advice and comments have you had about it from users?

As Andrew alluded to, we have a hierarchy of things that we do in terms of our governance and oversight. Obviously, there are the frontline things that Hannah has described. She engages regularly with these institutions and gets a raft of financial information directly from them, and then within the Department, there is the analysis and assessment that we do for these institutions and the other arm’s length bodies—DCMS has 42, which is quite unusual. The strategic indicator tool is an internal tool with which we have been pulling together financial and risk metrics, as just another way for us to assess what is going on. There is work is still under way in your team on that, Andrew, isn’t there?

My characterisation of the tool is that it is a testing and systemising of information that we already collect, probably in a more anecdotal or conversational way. It looks at a number of functional metrics, as well as finances—risk, some of the cyber data and some of the other functional inputs—and it puts them in one place. That will give us the advantage of being more joined up internally in terms of how we engage with these organisations, as well as being beneficial to the organisations, because they will not have to repeat themselves to lots of different teams across the Department about areas of concern. We have been working on the tool for a while, but it is there almost as a beta demonstration. It exists; we just need to go through the final bits of sign-off on our side and check that it is doing what we want. We are also mindful of the recommendations in the Report and the things that we really want to take forward. We want to align it with those things that we are going to be measuring and the indicators in that space.

You described it as being in the beta stage. When do you expect it to be rolled out? If it is being used in a beta stage, what are you looking at in terms of the ratings, and how is each museum factored according to them? Which has appropriate risk appetite? Which has appropriate financial resilience? That sort of granular information would be very useful for things like this Report. Is it something you would be willing to provide, and can you give us an update on when you expect the tool to be rolled out?

I think we would say that we would expect it to come out later this year. As I said, we want to align it with the things that we have been asked to do about wider museum performance in this Report. In conversations I have had with functional teams preparing for this conversation, a number of them have mentioned the tool and said how they have been inputting into it and thinking about how they characterise that.

I want to squeeze in one question before I leave, and I do not mind which of you answers it. What concerns me about this grant in aid structure is that there is no incentive for any of the 15 institutions to produce a better offering, such as a wider variety that would encourage more visitors to come and encourage a better financial outcome for each of the 15. What is it about the structure that will encourage the institutions to do better? There must be almost an incentive not to do better, because they think, “If we just carry on as we are, we get a nice bit of grant from DCMS and that’ll enable us to carry on until next year.” How do we improve ourselves?

It is a really important point. How we get the incentives right is something we are always thinking about. Although, as the NAO says, some of the longer trendlines on total grant in aid have increased since pre-pandemic levels, in practice it has been quite lumpy, as some of the graphs in the Report show. I do not think that any of the institutions, from a financial perspective, are necessarily sitting there feeling that they do not need to do anything and can just wait for the money. I was just reading the press about the new V&A in Stratford, and there are lots of examples of that. As we know, the British Museum is going to have the Bayeux tapestry here later this year. We feel that the institutions are incredibly motivated and incentivised. If anything, they often want to do more and faster, and it is a reality of the financial position that sometimes they cannot. I do not worry that they are not motivated, and even when we give money, if it is some of that top-up funding that the NAO talks about, quite often there are specific obligations on them to get it and sometimes we are also looking to see certain things from them. I think the incentive is there, notwithstanding the fact that, on average, 46% of their money is grant in aid at the moment.

Thank you very much. I apologise to everybody for having to leave, as I said earlier, for an important ministerial meeting. We will take a short break now, following which my very able deputy, Clive Betts, will take over. I suggest that we come back promptly before 4.20 pm. That would be very helpful. Thank you very much to all our witnesses; you have been very helpful indeed. Sitting suspended. On resuming— [Mr Clive Betts took the Chair]

We have had quite a lot of discussion about financial management capabilities within the museum and gallery sector, and an important part of that is having the right board composition. There have been a lot of delays in appointing board members. Why is it taking so long to get the boards up to the level they should be at, and that I know the museums and galleries want them to be at?

Thank you for that question. It is something that is very much on my agenda. The NAO Report sets out that, in 2024-25, appointments were taking much too long. They have got slightly quicker since then, and I am happy to say that a number that were outstanding at that point have now been put in place. All the museums and galleries have always been quorate. The point about the timeline is a focus for us. DCMS is responsible for more than 400 public appointments, and we have done about 190 since the last election. We have a really good team, but in practice a whole range of different things happen in these processes. A lot of the trustees that we are appointing—we are responsible, in large part, for the chairs and the trustees who are, in effect, the non-execs; we are not responsible for the executive teams of these institutions. These roles are often unpaid, and it is not always the case that all the factors go the way we want them to go. There are some things that we can control—that is what I am focused on—and there are sometimes things that happen that are outside our control. Last year, I did a review of our process for appointments to understand all the stages of it, and the team have clarified the roles and responsibilities. We have really tried to look at some of the ways in which we can squeeze the timeline. Some of it is about speed to interview; some of it is about the clearances we need after a decision has been made by the independent panel; and some of it is about the last stage of acceptance. All of it is in my focus, and yes, absolutely, it is too slow.

To be clear, the challenge is not so much people who want to take up those roles, because you mentioned that they are unpaid. Of the 400 public appointments that DCMS is responsible for, how many of them are in museums and galleries specifically? What I am trying to get at is whether it is a capacity challenge within DCMS.

That is certainly something I have looked at, because all of our resources are fairly limited, but I do not think it is that. We are responsible for about 212 appointments in these 15—within those 400—so it is the lion’s share. We are interested in the whole supply chain—if I can call it that—of the process. Since the Secretary of State has been here, she has wanted us to shift the dial on the sorts of people who might be interested in these roles. She wants people from all over the country; she wants people from different backgrounds. That is part of the reason why there was a bit of a delay after the general election, because we changed some of the processes that had been open under the last Government. That was definitely part of the reason for the significant delay that the NAO identifies in that year, but it is the full supply side. I do not think it is actually to do with my team’s resource; it has really just been a whole load of different things that we are trying to get in order to speed them up.

How many current vacancies are there, across the boards?

Currently—let me get my numbers right—I think we are down to 27, which is 11%. It was at a higher number.

Have we had an unusually high number because of the general election, as you mentioned? Or is there generally a lag that you are trying to address?

I think the general election had a really big impact, but we want to get on. We are also trying to look at reserve lists and where we can do batch processes, because if there are similarities in trustees, is that for different institutions? Is that a way we can speed up? We are trying to look at all the different ways in which we might do this.

I can see the advantage in making sure that you have quality appointments and that you have diversity in the people who come forward—that is not always the same process that gets the same sorts of people—but obviously that has to be balanced against speed. Do you think you have got that balance right?

I have said that we think they are too slow, but given the earlier conversation about these being freedom bodies with significant, in effect, delegated responsibilities, it is really important that we do not compromise on quality. Ultimately, a lot of what happens is the work with the institution—for example, with the chair—on what sort of capabilities he or she is looking for in the trustees they are advertising for, and on where we think we might be able to get them. DCMS almost never uses headhunters, so the other thing is trying to get really good networks to find a way to access, for example, a property expert, a digital expert or a finance expert. I think the quality is paramount.

Have you looked at whether other Government Departments do it better than you?

I think that all Departments are always looking at each other, but obviously we talk to others about things like public appointments, not least because we are bound by the code on public appointments, which the Cabinet Office is responsible for, so we talk to the Cabinet Office. Also, last year, I not only did an independent review but asked for an external review by Dame Bernadette Kelly, formerly of DFT. I was really interested to see what her experiences had been at that Department, which has some important arm’s length bodies. We have tried to find out who does what well and where we can use those practices. I do not want to imply that the team do not do a really good job, or that we do not have fantastic people coming through this pipeline; it is really the timeliness thing that is in my spotlight.

So we expect to see timeliness improve in the next year?

I absolutely hope so. The trend line is moving in the right direction, and we are already better than we were in the NAO Report.

Moving on to certain aspects of collaboration, I call Chris Kane.

I refer to paragraph 3.26 on page 42 of the Report, on your role as a convenor and enabler. Paragraph 3.26 talks about “common resilience issues and opportunities,” such as cyber-threats and scope for introducing further shared services. It says in 3.27 that, “The majority of M&Gs told us that DCMS supports efforts to share good practice between themselves”. That figure was at 64%, which is good, but there is a lot of room for improvement. How are you going to support museums and galleries to collaborate and address the issues they are going to face in the future?

Thank you so much for highlighting that, as it is a really important issue from our perspective. I will start and then bring in the team. Since I have been permanent secretary at DCMS, I have been trying to build a community across the chairs and chief executives of the arm’s length bodies, so that we can work on those common issues together. We see them together four times a year, twice in person and twice on a call. One of the things I always say to them is, “What are the issues on your mind?” We have a whole list on our mind, such as cyber in particular, and thinking about some of the ways they can share best practice on digital, AI and some of those shared services. We try to make it a dialogue with them and then focus those sessions specifically on sharing best practice. For example, after the awful events with the British Library cyber-attack in 2023, we got the then director to do a session for all of the arm’s length bodies to talk about that, and I think they found that incredibly helpful. We do the same at the audit and risk committee chairs forum. Andrew, you have various fora, so would you like to come in on that?

On our approach to shared services, there are a couple of other things that I would draw out. These apply to all arm’s length bodies, but obviously museums and galleries are part of this. The first is the role of the convenor, which Susannah has talked about. As well as those forums, there is a finance directors forum, and we are setting up a chief digital officers forum for next year. There is also a strand about the Department’s position within Government shared services. As a Department, working with four other Government Departments, we are in the process of getting a new finance and HR system. In shared services, when you are talking about core finance and HR as functions, and how you share those, the first enabler to make that happen is to have a common system, because it is quite hard for you to share if you are not all operating on the same system. We, along with the Cabinet Office, will go live later this calendar year with a new finance and HR system. Another three Government Departments will join that in 2027, and after that there is the opportunity for arm’s length bodies, including museums and galleries, to join the platform as well. A number of museums and galleries have expressed an interest. There is clearly quite a lot to work through, because it implies that you have some commonality of policies. There are obviously challenges there, because they are independent organisations, so can we use the same system while they maintain their freedom and independence? For the first time since I have worked in DCMS, we will actually have a system that is worth others joining and using, so that will unlock things. The final thing to say is that, as an executive board within DCMS and working with arm’s length bodies, we have looked to see where the most benefit is, in terms of where we join up and share. The thing that has come through, and that we have reviewed as an executive board, is sharing more on cyber. We have done a lot on cyber, and I can talk more about that if it is of interest, but that is an area of particular focus for the year ahead. As well as setting up this forum, we will be working closely with the organisations on how we can provide central advice on improving cyber-resilience and minimising the threat and impact of cyber-attacks. That is going to be a big area of focus. It was a conscious decision for us to look across a number of functions managed in my area, and that is the one that came back. As reflected in the Report, that has also been supported by organisations telling us that it is where they really need some support and help.

It is also worth talking about some things that museums are doing for themselves as a group, with our support. I point to the national museum security group, which has 200 museums across the UK looking at their security. That is very important, especially in the light of what happened at the British Museum a couple of years ago now. The National Gallery has had a very successful increase in some of its commercial income, led by its commercial trustee, James Lambert, who runs Bicester Village. We did an initiative this year where he took a bunch of different museums and galleries for a day in Bicester Village so that they could talk and share various things they are doing in terms of their commercial income. That has turned into an annual thing. I think the Natural History Museum is going to do it this year, and I think it is going to look at membership, but that is all to be decided. There are lots of those softer examples of us just encouraging museums and galleries to get together to talk about best practice. We really encourage that, as well as the more formal things that we do with our systems.

There are a lot of good things there. Your enthusiasm for all of this is coming through. Let us try to unpack some of that. I think my colleague Sarah is going to talk in a minute about some of the physical problems, so let me stick with cyber—let’s talk about that. I also want to talk more about cost sharing and what sort of information and best practice is being shared in these forums. One issue that I do not think you really touched on, but that I would like to talk about, is digitisation of collections. We will start with cyber. What are you doing to support museums and galleries to address the increasing threat from cyber-attacks? You mentioned 2023, but it seems like it is getting harder every day. Can you talk a little about what you are doing on cyber?

A number of things. The Committee will be familiar with the Government’s cyber action plan, which was set out earlier this year. In setting out a path to greater resilience across public bodies by 2030, I think it is a really helpful framing of the landscape because there is a shared level of expertise across organisations. In the same way that you would expect a museum or gallery to have quite different physical security arrangements from a Government Department, with things such as visitor flow, that applies to cyber-security as well. Only the organisations know what their technical architecture is and where their threat aspect is. They have very different systems in terms of customer databases—things that we do not hold in that way. There is a role for them, but what we are particularly looking at is how we can co-create artefacts that can be used and shared across ALBs. How can we enable access to relevant services and suppliers? One of the advantages that freedom bodies have is that they can use Government procurement frameworks if they want to, but they also do not have to. Particularly in this area, where there is a shortage of skills and expertise, how do we get them access to the right suppliers? We also know that the organisations work very well together. How can we build capability and talent, and provide skill development, across the organisations in that way? There are skill shortages and things that we need to do in that space. Those are all areas that we are looking to improve. It is on our risk register, and it is on all of their risk registers. It is something that there is a lot of concern about. There is a lot of work going into how we best mitigate that and reduce the impacts of anything.

Paragraph 3.27 of the Report says that some museums and galleries “consider that DCMS could do more to help through its convening role to facilitate and support greater collaboration in tackling challenges, or by providing seed funding” to museums and galleries to “build skills and capacity”. On this Committee, we hear all the time that there are just not enough people doing cyber, and that the ones who are doing cyber are in great demand. Therefore, bringing together 15 museums operating within that same sphere to get that shared service and approach would seem to be vital. How are you tackling that side of it? How are you going to judge success? It cannot just be based on “They haven’t had an attack”, but on how they are prepared for it.

Yes, absolutely. I would characterise it as moving. We have supported the organisations over the past few years, but probably in a more reactive way, so that there are things available to them in the event of attack. We also have an email address for a team that will respond to specific queries; obviously some organisations have taken that up a lot, and some we have not heard from. I talked about the chief digital information officer forum to bring people together, but we are also bringing together the chief information security officers from these organisations across the wider ALB landscape so that they can work together, share reflections and almost set the agenda for what we should work on collectively. I come back to the point I made earlier about skills development and identification. It can also be quite lonely when you are in a function with only one or two people within the organisation, and you haven’t got a peer group. I think that creating that virtual peer group across the museums and galleries across the wider ALB family will really help in that.

We also prioritised a little bit of money this year, didn’t we?

Yes. Within our internal IT budget, we have set a small amount of money aside to support arms-length bodies in doing this assurance work and to take forward these options.

Cyber is about the sort of bad stuff, and we will have to help them as much as we can, but what about some of the good stuff around digitising collections? I guess that is laborious and time-consuming and can be expensive, but ultimately that is going to make the collections more accessible. What are you doing to support them to digitise and thereby make them more accessible? Just to touch on shared storage services as well, storing their collections is a big deal, so you have a lot happening there. Talk about that for a minute.

I will hand over to Hannah to talk about some aspects. In terms of physical storage, some of our large-scale capital programmes—particularly one we are supporting a lot around Natural History Museum Unlocked—are about resolving that storage issue for specific museums, and they have learned from other museums in doing that. We also ran a project within the Department to empty Blythe House, a property in Kensington where material was stored by a number of museums and to put that in more appropriate storage conditions. That project, in terms of taking the articles out of Blythe House and putting them into safer storage, went really well. We still have to dispose of that asset, but that was a project that was managed well over the last few years. Hannah, you might want to say a bit more on digitisation and other bits.

I can do that. I also wanted to say that, as the NAO set out, there is an excellent example of our museums sharing storage with each other: the National Portrait Gallery already leases storage space from the Tate. We do talk to and listen to our museums quite often, and they do talk about storage. We are really grateful that the NAO picked this up as one of the issues because it is one of the things we wanted to look at and discuss with the museums, and to use our convening power on. It is clear that we need to look across the museums at all the options for how they could save money on storage. Some of those options will cost money up front, and that is the difficulty—of course, that will be subject to any spending decision—but we agree that we should look further and dive deeper into how museums are making best use of all their collective storage space. On digitisation, there are, as you say, some excellent individual examples, the most notable being the Natural History Museum leading a 10-year project in partnership with the Arts and Humanities Research Council. The project is called DiSSCo, which stands for the distributed system of scientific collections. Essentially, it is a £155 million national infrastructure programme which aims to digitise the UK’s entire natural science collection. Announced in March 2024, and funded through the UK Research and Innovation infrastructure fund, it really shows the Natural History Museum leading the way in the digitisation of collections. It is estimated that it will bring £2 billion of benefits over its lifetime because of the amount of research.

It is the sharing I am interested in. They are the best example, but you are supporting 14 other museums, and you have dozens and dozens of other museums around the country that would benefit from that knowledge. It is about getting economies of scale and sharing best practice. What are you doing to get all that information out to the 14 others, but also disseminate it more widely?

I mentioned earlier that we have the partnership meetings. On top of that, we have a monthly meeting with all the accounting officers where they share with each other what they are working on. Digitisation has come up in that, and the Natural History Museum has presented to colleagues in that. The British Museum also has a £10 million five-year project to digitise their collection. Digitisation decisions are for the individual museums to take. Care of the collections is a part of the fiduciary duty of the trustees of each individual museum, and the digitisation of collections would come under the banner of how they are caring for their collections and also their second objective of making them accessible to members of the public. We absolutely agree with the NAO that we can play a stronger convening role and, as highlighted in the Report, help them to share best practice and learning. As Andrew mentioned earlier, we are looking to set up a digital data and technology forum to address common technical challenges. One of the things we could expect them to look at, assuming that there is appetite among the museums to do so, is digitisation.

Your point is exactly right, and as the team say, there is a lot going on, but if we all cast our minds ahead, this is obviously going to be one of the most significant areas of work. I have never had a meeting with all the ALB chairs and chief execs where we have not ended up talking about digital and AI. That is partly because of the expertise some of them have, such as Doug Gurr at the Natural History Museum, but it is also because, for all sorts of different aspects of their work, the digital and AI revolution is potentially very significant. These are all asset-rich organisations, and, as you say, the issue is how and on what basis they can digitise. We want to make sure that we help them with that work and convening well.

I am conscious that I only have a little while before the Chair takes me off the gallery floor and puts me back into storage, so can we talk about sharing financial costs? Paragraph 3.28 says that, in helping the sharing of financial matters through forums, cost saving did not seem to come up as much as it could, and. What can you do to encourage getting them to be more open with how they are saving costs and how they can share that?

As part of our spending review settlement, we have now, since the NAO Report, communicated the forward funding to them, and we and all the ALBs will be doing cost saving as part of that. Did you want to give a flavour, Andrew, of some of the areas and some of the common themes that are coming up?

There are probably two different things going on here. One of them is a challenge I alluded to earlier about financial systems and comparability. Some of what the NAO Report says is, “Can you share the cost of paying for different things?”, where there is always a bit of a challenge of how you get the data right so you are confident that you are matching apples with apples and are getting a consistent basis. In terms of cost reduction measures, that is part of what is talked about in partnership meetings; it is an area of challenge. It is discussed when organisations flag that they have financial issues and challenges in that space. There is something there about how we do that more systematically, but that is probably one area where the organisations self-inform each other quite well about the things they are doing. There is quite good knowledge across the sector about where they are making reductions, either by looking at how they get the staff mix right and evolve in that, but also where they are doing “invest to save” projects or taking costs out of that.

I am going to try to bring this all together very quickly; I know I am pushing my luck. I love what I am hearing, but it feels like, although you are convening everybody there, you are not showing them the carrots and the sticks to make them do better. You are enjoying the sharing of the knowledge, but you do have carrots and sticks available to you to make sure that things are efficient and move forward at pace as much as they need to in their particular areas. How do you stop being the host of the party and more the people that say, “We’re putting a lot of money into this. Here are the targets. We want you to do x, y and z.”

It goes a bit back to the Chair’s comment about incentives. The lived experience, even though we have done a lot, is that there is a lot of incentive in these institutions to look at their variable cost base and see where they can save money, so that they can drive a greater bottom line from their self-generated income and use that to invest in growth. It definitely feels like they are interested in our convening role precisely for those shared areas of best practice, but they are doing a lot themselves to manage their costs. Quite a few of them have taken specific measures, even in the last year.

I would say two things, perhaps more, on the stick side of that, to use your characterisation. One is that we have written efficiency targets. Through the spending review, we have used ALB data to contribute towards our DCMS group efficiency targets. We have a list of programmes where costs are coming out of the organisation that we will be tracking, monitoring and feeding back to Treasury through that. We have also put that into their year-to-year financial settlements as well. That is a level of visibility and granularity that we have not had before. When organisations approach us about cost pressures or tricky financial situations, that is one of the things that we ask them about and push them on quite hard. We ask, “What have you already done? What other sources of funding have you looked at? What have you looked at in your cost base and can you demonstrate that you have taken money out of your cost base?” You would not expect us not to be having those conversations and being quite challenging in that way.

Ms Malik, in relation to the digitisation of content and the care of the collections that you were discussing with Chris, you mentioned accessibility to collections. Is that intended as a requirement to offer accessibility to audiences who cannot currently experience the collections, or does it mean accessibility generally?

Each museum must, as one of its core objectives, make its collection available to the public. For most of them, that is about choosing the selection to have on display in their museums. Additionally, sponsored museums do a large number of loans to other museums all around the country, so many of those objects are also displayed in museums around the country. You are right that digitising collections makes them available to an even wider audience globally.

Mr Pattison, you made a comment about shared financial platforms, and that it was, in the end, down to the institutions themselves whether they want to do that, because they are independent. Given that these organisations are reliant on public funding, should there not be some condition, as part of that funding, obliging them to co-operate and share in arrangements that will largely lead to better value for money?

I completely agree with that statement. The reason why we are not mandating it is that point about, “Is it value for money for the organisation to join that system?” Some of the organisations that we are talking about here are extremely small. It might not actually be that the ERP solution we are implementing across five Government Departments is appropriate. Certainly, the Government shared service strategy has an expectation that we encourage organisations to do that.

Is the expectation for it to be a requirement in the appropriate cases?

I think the expectation at the moment is to encourage organisations to do it, and work towards it. One of the things that will evolve through our implementation and through the implementation of the other Departments is the exact costs for organisations to join the system.

You did not really answer the question.

Sorry.

If you come to the conclusion that it is beneficial to the organisation and to the value obtained for public spending for an organisation to join a financial platform—or anything else regarding the sharing of financial information—shouldn’t you be requiring it as a condition of them being funded? Susannah Storey: We would not rule that out. I think what Andrew was explaining relates to that shared service system, which we are not even yet on; there is proof of concept and then there is applicability to the individual institutions. Certainly, if we thought something would be better VFM for them, we could look at that. At this stage, it is too soon for us to say that we would do that.

I am still not convinced that there is an attitude in the Department that says, “This is public money, and we should be giving it on the basis of certain conditions, if appropriate.” Susannah Storey: At the moment, the basis on which we give it, which the NAO set out well in figures 10 and 11, is meeting their core obligations to preserve their collections and ensure access to the collections. Then we have been ensuring that they can use their freedoms to generate sufficient commercial revenue to meet the rest of their financial obligations. On your point about whether there is a way we could get better VFM or oblige them to do something, I certainly would not rule that out. I just meant in relation to shared services. At this stage, I do not think we should commit to that.

Okay. We might come back to that one. In the meantime, let’s move on to the issue of thefts.

I would like to look at the high-profile instances of theft from national museums. We have touched on the cyber side of things, but some of the things that have been highlighted in terms of these thefts is that they are internal threats, there is a danger of delayed transparency and there is a real need for fundamental security infrastructure. What lessons have been learned on the back of these thefts, and how is that information being shared with other museums and galleries? Susannah Storey: We have already touched on cyber. After that, the British Library put out lessons learned, and I think it will still carry on doing that. Polly, do you want to talk a bit about museums and galleries? Polly Payne: I mentioned briefly the national museum security group, in which 200 museums across the UK get together and share best practice, including obviously learning from the British Museum. They also regularly liaise with UK law enforcement and make sure that everybody is learning both ways on that. What happened in the Louvre is obviously another instance, and people are learning from that. In some ways this does not initially sound reassuring, but maybe it is: in the last four years, there have been four instances of theft or missing objects from our 15 museums and galleries. That sounds very high, so we looked into it. One was obviously the British Museum in 2023—we know all about that. One was a cannon that was stolen, probably for the metal, from outside the Royal Armouries. One was two pages in an Elizabethan album of designs, which was recorded as not in place in 2019. The system is that if something is repeatedly not in the place it should have been during an audit, there comes a point where you have to count it as a missing item. The fourth was an employee who had stolen some money. The reason for going through that is just to say that, for our 15, we have records of the instances of thefts or things not in place over four years. We take it very seriously.

Going back to digitalisation and digital inventory, obviously there will be lots of items that are not categorised or on the system, and may be in storage. How do we know, in a timely way, what has been stolen? Polly Payne: That was absolutely one of the issues with the British Museum theft, as you will know. That is why it has put its own money into making the records better. That is something that all our museums and galleries have taken note of. Some of them have an extraordinary number of items. That does not mean that they do not have an obligation properly to record all the items, but it does show the magnitude of the task. Absolutely, however, it is making sure of really proper record keeping, which I think will get easier as we have digital technology, because the digital technology that is increasing access across the world also makes for better record keeping. It is much easier to understand what kind of object you are looking at if you have very detailed photos of it, rather than just having a manuscript line, which used to be the case.

On specific lessons, can you give us some examples of things that will change as a result of the thefts?

A specific example is digitising more of the collections at speed, in particular for the British Museum. That is a concrete example. I am trying to think of the other concrete examples. Hannah, from the British Museum what are the lessons learned?

Digitising the collection is top of mind, because that is the one that is still in progress. We ask them about that regularly—how they are achieving, whether they are on track.

I think it is fair to say—it was quite soon after I became permanent secretary that the awful events at the British Museum happened—that the scale of the shock definitely reverberated around all our museums and galleries. It is one of those things, a bit like with cyber, where if there is a very difficult incident, it goes straight on to all the audit and risk committees. They are looking at it and exploring it, and it has certainly shot up the agenda because of that.

What about things of an internal nature—I am not just talking about what happened here, but as we have touched on, the Louvre and so on and so forth—like whistleblowing? If concerns have been raised, are we confident that we have robust procedures there for people to share concerns? Is offboarding, when people leave the organisation, and security access or their ability to get into the system, being audited in any way? Is artwork on databases, so that people know that these things have been stolen? Are all those types of things being considered?

Yes, absolutely. Those are very much operational matters for the individual museums and galleries. As we have referred to, they are very different. The Museum of the Home, which is one of our 15, has 42 staff, whereas the Natural History Museum has over 1,000 staff, so very different systems are in place. One of the things that was a shock to the sector with the British Museum was that—allegedly anyway, because there are still proceedings—there was cause to think that it was an inside job, possibly a member of staff. I think that made everyone look very hard at exactly the systems you are talking about—access, and having great records of the access, in particular when people are there by themselves.

Making sure people only have access to the things that they need to have access to, I suppose.

Exactly.

On the security systems themselves and modernising, is support being given to make sure that security standards are where they should be?

Again, that is an operational matter and the responsibility of the trustees. It would come out of their general funding—I do not think they have individual budgets for that. In the partnership meetings that Hannah talked about, we do look to their risk registers and the ARAC discussions. Absolutely, this was something that all the ARACs treated with increasing concern. A bit like with the cyber-security attack on the British Library, it made all the ARACs make sure that they had their own systems in place. They take it very seriously.

You are saying it is operational, absolutely, but a lot of these are top-level things that can be replicated across any museum or gallery—making sure that security is up to scratch, and that they have robust offboarding processes and regular training, I suppose. All those things can be disseminated across the board, though they may be done in different ways. What role does the Department have in making sure that they are meeting their obligations in that way, or supporting them to do it?

The Department has a range of support. There are the partnership meetings, which ensure that those areas are discussed. Susannah has talked about the regular CEOs and chairs meetings. Andrew has talked about the regular meetings with the finance directors and the heads of ARAC. Those are all forums where that sharing can be brought together under the DCMS banner. There is also the group that I have mentioned, the national museum security group. That is another forum where those issues can be discussed.

On the funding of the museums and galleries, is it a challenge to encourage them to raise their own income—which is really important—and to raise more of it, if they know that, at the end of the day, you are just going to give them enough money to keep going?

I do not think it has been a challenge. As the NAO Report says, the £563 million, although broadly flat on the pre-pandemic level, was significantly up in recent years. As Polly and Hannah have spoken about, they are very focused on the income that they can generate, whether it is commercial things through their shops and cafés and so on, or charitable revenue they can raise, perhaps through exhibitions. The other way that we see them raise significant money is through philanthropy, donations and, of course, membership. I actually think they are very focused on that. I do not know whether Hannah wants to add anything in terms of her conversations with them.

As Andrew said earlier, when we are speaking to them about what they are doing, they say to us, “We are slightly concerned; we are perhaps not meeting some of our exhibition targets.” We continually talk to them, as I say, on a quarterly basis. At no point do we say, “That is fine, we’ll have some money for you.” We will say, “What have you done to control your costs? If your revenue is not hitting your targets, what are you already planning to do to make sure that your costs come down, if your revenue is not quite where you want it to be?” Those are the conversations we will always start with before we go anywhere else.

But at the end of the day, you are not going to let them shut, are you? They are going to be open whatever happens. If they say, “Why should we bother trying to raise extra money?”, that is because, according to some of the financial settlements in previous years, there have been top-ups in those settlements to reflect the financial challenges organisations are facing.

We did do £178 million of top-up during covid, but, as we have discussed in previous hearings, that was such a structurally complicated issue. One of your colleagues used a RAG rating earlier of “yellow flashing”, and that is probably about where we think their financial position is. I do not think we are sitting there thinking that they do not need to raise commercial income, and they are all very focused on it. We feel no lack of incentive or motivation from them. Andrew might talk in a minute about our spending review settlement. In the context of the spending review, we describe it as a solid outcome, but for DCMS, with its overall RDEL and CDEL settlement, in the end, there will be below-inflation increases in some areas. The financial realities are there. We are also very mindful of the fact that, even now, with the backdrop of the Iran situation, there could be serious energy cost increases or some areas of their cost base that will grow in a way that is not manageable, whatever they do on their variable costs. The financial position means that we, and they, are incentivised to pull every lever at our disposal and try to make sure they are driving up those sources of income. It was good to see, for example, that National Gallery got an extraordinary philanthropic donation recently of some hundreds of millions of pounds. There have been some moments of success, but often, as the NAO Report says, those are for specific designated purposes, so the general finances are something we are still very focused on.

It is worth pointing out also that, if you look at the total self-generated income, it is £563 million, and that is a 0.1% real-terms increase on the pre-pandemic figures. That is despite the 13% visitor reduction that we have already discussed. Despite international visitors going down and cost of living concerns, in real terms, the self-generated income has increased—albeit not by a huge amount, but it has increased. That is tribute to the hard work they are doing.

There is a difference in scale here. We encourage them to have a diversification of income and to raise income from other sources for lots of reasons. Diversification of an institution’s income increases resilience and the amount that we can intervene in and the amounts that the NAO calls out in terms of one-off funding that happens in-year are very small and very targeted. There is far more incentive on the organisation to seek other sources of income and external income than there is to think that the Government, or DCMS as the face of the Government, are going to have a massive pot of money that they can pay people out of.

Permanent secretary, you said that this was a covid-related issue in the way you approached the funding, but it is not just covid, is it? Until the 2025-26 settlement, you have basically been giving an inflation-linked or standard increase to all the organisations and then looking at their financial difficulties and doing top-ups. That does not incentivise how they operate in any way, does it?

Sorry, I did not mean to say that was a general trend. What I was referring to was that during covid, we did give them additional income on the revenue line that we had not otherwise done.

Right, but it is not really encouraging them to operate efficiently or encouraging income generation if you operate on a flat-rate settlement and then top up according to financial difficulties.

With the greatest respect, I would probably challenge that to some degree, because with a standard increase, the percentage varies depending on the financial settlement and the decisions that we make internally about the allocation that goes to this sector. Applying a flat rate means that there is consistency across the sector, whereas a more interventionist policy where you are following a formula and tracking different things would increase the perverse incentives that you are worried about in that space. Our standard model that we would do most of the time is to have a standard percentage that applies across the piece. Sometimes there are challenges with real-terms increases in that space, and the Report talks about some of those things, but I think that is a way that provides greater security to the organisations to be able to look for other income sources than an alternative where you are saying, “You’ve done really well; you’ve had a blockbuster exhibition. Therefore, the Government are going to reduce their share of funding that goes in there.”

But you have changed your approach. Prior to 2025-26, it was very much, “Here’s your standard amount, then we will look at whether you need more.” In 2025-26, you varied the initial allocations and looked at various measures to decide how they should be varied. This year, you have gone back to standard allocations. It is difficult to understand why this change is happening.

Let me try to help explain that. In the run-in to the spending review, and partly because the financial resilience of the national museums and galleries had reached pretty much right the top of our risk registers, we did a lot of work to work out what was going on. In the light of that, what we sought to do with the spending review that first year, which is one of the biggest levers we had, was both address some specific structural issues for a number of them but also top them up to 5%. Since then, at this stage, we have gone back to uniform allocations. As we look towards the next spending review, we will certainly be looking at all the metrics of their resilience and what is going on, and I would not rule out doing that again in the future.

Doesn’t that mean that the organisations have not got a clue what is going to happen in the future with their funding?

No, because since the NAO Report, we have given them not only the money that the NAO talked about, but their indicative budgets for future years. One of the recommendations was to talk to them about the factors that we use, and we worked very closely with them as we went into the spending review. Now, they have longer-term clarity on where the grant in aid will be. We touched on this earlier, but for that spending review, we also tried to push towards capital, because when you look back at historical numbers, many of them had been pushing out their maintenance and capital costs. That is a rational thing to do if you have financial concerns, but we were worried about some of those costs, which is why we increased it slightly in those years.

The Report talks about doing a periodic review, similar to what we did in the ’25-26 settlement, in which we look at a broader base of factors than just a percentage. I appreciate that it is a mixed model, so it could look confusing, but it gives us the flexibility to respond to factors in the sector on a periodic basis—probably every four years or so. It is also influenced by what museums and galleries are telling us about the level of financial pressure. That was particularly acute in the run-up to the 2024 spending review, which set the allocations for ’25-26.

If an institution gets into serious financial difficulties in the meantime, do you have a fund down the back of the sofa that you can pull out to bail them out?

It definitely does not feel like that in DCMS.

Not in the Department, no. We are aware of opportunities within that, but obviously if there was a serious issue, we would work with the trustees of the organisation, the Treasury and others to understand the situation and how we could best intervene.

As the Report says, in the past we have sometimes had underspends. In those cases, where it has made sense to, we have allocated small amounts of money to them. But absolutely: if something more material or, despite all the information that we have, unexpected happened, we would work closely with them to try to understand what was going on. We would then have to think about the art of the possible, and whether it was something where we or some other part of Government had money, or whether we would have to do something else to make sure that they were a going concern.

You just mentioned the possibility of a big increase in energy costs, which might affect some organisations more than others. Is that something that you are giving thought to now?

Yes. Like all Whitehall Departments, we are absolutely focused on this situation and what it could mean. As Hannah said, we are talking to museums and galleries at partnership meetings to understand their perspectives. There are no plans to do anything bespoke or specific at this stage, but this issue is definitely in the spotlight.

You have mentioned multi-year settlements, and Catherine McKinnell will now pick up on that.

What work are you doing with museums and galleries to make sure that they can take full advantage of the flexibility and additional planning they can do under the three-year settlements? Are you supporting them to ensure that they maximise the opportunity?

It is a really good question, and it is really important to us. Our rule of thumb or guiding principle on that is to share what we know with the organisations, and therefore with the museums and galleries. We have had a number of one-year spending reviews, for a variety of reasons, and in those cases we can only provide that much certainty going forward, but we provided them with indicative allocations for ’26-27 last autumn, and we wrote to them last month to provide indicative allocations for ’27-28 and ’28-29, so we have tried to give them as much forward-leaning information as we can. There are benefits of multi-year spending reviews, and I completely support the concept of multi-year budget setting. It is really good that the UK Government does it so that the organisations get the benefit. Obviously, that information is heavily caveated, because we as a Department do detailed business planning on an annual basis. The indicative allocation includes an amount of money to go into museums and galleries going forward, but when we look at the pressures and things around that, that may change. Also, the current financial framework that the Government have set out means that there will be a spending review in 2027, because we are in a cycle of doing a spending review every two years. Our ’28-29 settlement may look completely different by the time we get there, for better or for worse. The spending review is an opportunity for more resources for our wonderful sectors, and for our wonderful museums and galleries, but there is also, as the Committee is well aware, quite a lot of pressure on Government spending across the piece.

Okay. I get the sense from what you are saying that the multi-year funding settlements will not actually make a significant difference, because the organisations are not able to rely on those projections to make multi-year plans.

It is indicative. It is helpful to them because it gives them some sense of the trajectory. I have called out a number of risks that might change it but, all other things being equal, that will be the settlement they get, so it is a good guiding principle. Certainly, in the conversations I have had with other chief operating officers, they welcome that because it gives them some sense of where we will end up.

Are you seeing a difference in approach? Are you seeing museums and galleries being able to make decisions that they may not have been able to make previously as a result of any of the changes?

Capital is certainly an area, because we have announced £480 million for the public bodies infrastructure fund going forward. It goes back to the point I made about enabling them to focus on their maintenance and capital, so that is certainly an area I would call out. As Andrew says, on the revenue side they at least have a base-case trajectory, and can then also plan their own commercial income. Did you want to say anything else about capital and PBIF, Hannah?

We announced £480 million for the public bodies infrastructure fund for the next four years, which means the museums know that there will be around £120 million a year for the next four years. When we asked them to put in bids to the fund, they did them in two tranches—for ’26-27 and ’27-28 and then for ’28-29 and ’29-30—so they were able to split it out and think, “What is the most value-for-money and effective way for us to manage the critical maintenance projects we have for the next four years?” We were then able to make decisions. We have not decided the latter two years because new maintenance issues arise. With estates as vast and historic as the ones we are talking about, new maintenance issues always arise, so it is important that we do not allocate all four years. We have allocated two years, so they have certainty for the next two years, and they have been able to submit for the further two years.

First, I agree that it is a cracking Report from Gareth and his team.

It is so helpful.

I am delighted to see that your visitor numbers, both domestic and overseas, are rising after some terrible decision making during covid, which affected everybody in the country, so that is good news. I should disclose that my brother is responsible, through his Madrid company—a business called Factum Arte—for making the diplodocus that sits outside the Natural History Museum. He did that using digital technology. The focus of my questions is the set of new priorities you introduced in July 2024, which are “Growth and good jobs in every place”, “Richer lives with choices and opportunities for all” and “A more socially cohesive country with an inclusive national story”. Did that come from the DCMS or the Minister?

From the Secretary of State.

It came from the Secretary of State. You hand out £484 million to these 15 institutions, or you did in ’24-25, and I think I am right in saying—unless you tell me differently—that in January 2026 you had not clarified how you intend to assess whether the museums and galleries are delivering against those three priorities. Has that been clarified yet?

The framework agreement referred to in figure 10 relates to the core objectives that we have already talked about. That is the basis on which we have been giving them the money. We have been putting the priority outcomes into the chairmen’s letters. Each year, alongside all the things we have already talked about, we write to each chairman or chairwoman to set out a whole series of common factors, including these sorts of things, but also some particular things for each institution. We have been telling them about that, and we are then doing our own work across the whole of DCMS on how we are going to measure the priority outcomes, because, as you can see, they are quite general. For example, on jobs, it was of course great to see the recent press on V&A East and what that has done for the Stratford area, and it may well be that in some places these institutions do drive direct growth, but we want to make sure that we ask them some specific things so that we can measure it.

Are they clear on what they need to do? Presumably, you will skew your grant funding towards those who deliver on your objectives. You are, after all, the master and they are, ultimately, receiving gifts. I am not sure from your answer that it is entirely clear to them.

They know about the priorities but we have not said to them, “You therefore need to do this number of jobs over this time period,” or, “This is the definition of social cohesion.” On that, we are going to come back to all our arm’s length bodies. It is part of the wider work that DCMS is doing on its outcome delivery.

Let us at them. “Growth and good jobs in every place” is verbal baby food. What does “Richer lives with choices and opportunities for all” mean? Does that mean you are going to hire people on merit, or through ability? I am not clear. I am of adequate intelligence—I am not very clever—but that is not entirely clear to me, so I do not see how it would be clear to them. You then have: “A more socially cohesive country with an inclusive national story”. Now, our history is our history, and geology is geology, so how does an organisation like the Natural History Museum change itself to deliver on an inclusive national story? Aren’t people coming to Britain because they want to see our history and our culture? Do those foreign visitors who come here want to see that interfered with? Could it not possibly damage the visitor numbers if you start messing around with that too much?

There was quite a lot in that. Is it okay if I break down some of the things you said?

I could not help asking because I think it is quite important.

Understood—of course. At this point, in their framework agreements they are delivering against their objectives of caring for their collections and ensuring that those collections are accessible on a free basis, because that is the policy decision. We also measure the specific KPIs set out in figure 11, which have been in place for a long time. We are updating those, as we have discussed, and we will publish them once they are updated later on this year. The priority outcomes set out on page 36 are at a higher level. For all of DCMS, we are really trying to use our agenda to drive growth—for example, we have been doing a huge amount in the creative industries space—and we are working out exactly what our metrics are. I think if the Secretary of State were here, she would be happy to talk about what she means by a socially cohesive country and an inclusive national story, and she feels that opportunity is not necessarily spread equally across the country. Those are high-level objectives; we want to work out specifically how we can allocate them in the museums and galleries context. We have not done that yet, which is why we are currently setting them out at a high level in the chairs’ letters.

That is quite important, because it might be her intention but they need to understand how to deliver against that intention. It is all very well to have intentions, but you are asking museums and galleries to try to deliver against a ministerial wish list, and it is not clear how you are going to judge them. You need to be clear on how you are going to judge them. I am not sure how you are going to judge against priorities that I personally find very difficult to understand. There are many more priorities that I would put at the top of the list, but I am not the Minister; however, if you are going to put them there, you have to tell people how they can deliver what she wants, and you haven’t.

At this stage we have told them what they are and they are aware of them, so they may well be doing things that contribute. What we haven’t done is said, “These are the specific metrics.” Obviously those will be clear once we have them, but they are not at this stage.

But what is an inclusive national story? How do you create an inclusive national story? History is history, isn’t it?

I do not think I am going to solve it right now. What I am saying to you is that they have their clear outcomes, and then we are doing further work in this area.

I would be careful not to damage a model that, as you said earlier, is very successful.

Can we move on? I want to pick up an important point about sharing success across the country in these arrangements. Looking at the map, there are certain parts of the country that have not got any museums and art galleries that you fund, but we still have museums and art galleries in other cities and parts of the country—Sheffield, in my case—for which you occasionally offer grant in aid funding. How do you balance the funding of these museums with the many other museums to get a better, more even spread across the country?

I know Polly wants to come in on that, so I am going to hand over to her.

There are a number of things to say. First, the map you refer to is of the sites of our 15 national museums and galleries. As you say, there are 43 sites in total: 22 are in London and the other 21 are across the country. Overall, there are 2,500 museums and galleries in England, of which 1,500 have ACE accreditation, and those are much more widely spread. To get to your question, the balance for us is that DCMS has mostly statutory obligations to support the 15 in full, so that is where a large amount of our focus is. However, it is obviously also really important for DCMS that museums and galleries service the whole country, so we have some buckets of funding to help with that. I would point to the MEND—the museum estate and development fund—which we have been running since 2021. That is capital for museums and galleries that are not in the 15. There is the museum renewal fund, which is because of particular problems that some of the museums have had recently. That was a 2025-26 fund. We have a museum transformation fund—again, these are not for the 15; these are for more widely spread museums and galleries. We have the DCMS/Wolfson museums. We also give money to the Arts Council, which spends about £44 million per annum on supporting a national portfolio of about 1,000 organisations, of which about 80 are museums and galleries, at 200 sites across the country. There is also tax relief. This is all in addition to the money that comes through MHCLG to local authorities, which are the main port of call for the civic museums. That is a very long way of saying that we really care about museums and galleries across the country. We have the 15 that we particularly focus on, and they do things across the country, but there are even more museums and galleries doing things more widely across the country, and we support them as best we can within our limited budget.

If you do not mind me adding something, one of the things Baroness Hodge talked about in her review was a new strategic framework for museums, and we have accepted that recommendation. In 2017, some work was done at a more strategic level, and we think it is about the right time to look at that. We do want to look at the whole piece. I think the work is starting on that at the moment.

Out of your total spending on museums and art galleries, how much goes on these 15?

About 25%, including capital.

So 75% goes elsewhere.

Sorry—out of DCMS’s overall spending, about 25% goes to these museums and galleries.

Of the money you spend on museums and art galleries, how much is spent on these 15?

For the next four years, we are spending £760 million on museums and galleries, of which £160 million is going on local and regional museums. The rest is the PBIF fund that Hannah was talking about. That is in addition to the GIA funding that the nationals get. The proportion that goes to the 15 is much bigger, but that is because we have primary responsibility for them. Other museums—

I am not asking why you are spending it; I am asking how much you are spending of your total budget. How much goes to these 15?

Twenty-five per cent of DCMS’s total budget goes on the 15.

Of the amount that you spend on museums and art galleries, how much goes on these 15?

That is the number you just gave, isn’t it, Polly?

It is bigger than that. That does not include the regular money. I would have to do the sums, add them all up and give them to you. I do not have it to hand.

Will you write to confirm that?

Yes.

Thank you very much. That brings us to the end of our questioning today. Thank you very much for coming and giving evidence to the Committee. An uncorrected transcript of this hearing will be published on the Committee’s website in the coming days. The Committee will consider the evidence that has been provided, and we will produce a report in due course.