Jobs are on the line: in one week in January some 15 councils announced plans for major redundancies. And let's not even mention the damage done by the spectacular failure of local authority investments in Icelandic banks.
On the face of it, all this is bad news for local authority-run or supported museums which, being non-statutory, have frequently suffered from budget paring whenever a council is looking to downsize.
The general economic turmoil will only exacerbate problems in Wales where local authority museums are already suffering "death by a thousand cuts", says Chris Delaney, president of the Federation of Museums and Art Galleries of Wales.
"As the Welsh Assembly Government and local authorities are keen not to increase council tax in the present circumstances it will put additional pressure on budgets," says Delaney.
"Also, as government borrows more to bail out greedy banks, there will be reductions in other areas of public expenditure. The upside is that as unemployment rises there will be government schemes to generate temporary employment like the old Manpower Services Commission schemes."
In Scotland, museums are already starting to feel the impact, says Joanne Orr, chief executive officer of Museums Galleries Scotland (MGS).
"We are facing a difficult financial year," says Orr. "We know that there are serious issues in Aberdeen at the moment. They were intending to close one museum, but they are cutting back on posts in cultural services as a whole. Independent museums will also be affected. The Scottish Mining Museum, for example, has had its funding slashed by Midlothian from £105,000 in 2008-09 to £27,000."
In fact, says Orr, Midlothian originally planned to cut funding to the mining museum altogether. MGS has helped negotiate a grace period to find a way forward for the museum.
Performance indicators
Key decisions on funding for Scottish councils are due before the end of March. In 2008, all 32 local authorities signed up to "single outcome agreements", which set out how each authority will meet the outcomes in the government's national performance framework. Budgets are set against the agreements.
With some councils facing shortfalls, Orr says "culture will have to make its case within the framework of the single outcome agreements, which could be challenging".
In England, the dire economic outlook is further complicated for museums by the impact of new performance monitoring introduced in 2008, which could have more far-reaching implications than a recession.
The new national performance framework for local government focuses on councils identifying and meeting local community priorities. The framework has 198 national performance indicators (NPIs) and councils choose 35 to include in their Local Area Agreements.
The ones they select should reflect their local priorities and those of their local strategic partnerships and will be used to measure how far the council is improving over time.
The fact that museums are represented in only one indicator augurs badly for their status, but the picture appears even bleaker when it emerges that just two councils - Rutland and Hartlepool - have chosen to use the museum indicator, suggesting most local authorities don't rate their museums as critically important to improving their services to the local community.
However, this is not necessarily a problem provided the directors of museum services recognise how they can contribute to the other indicators and to their council's overall strategic vision, says Adrian Babbidge, a local government specialist at the Egeria consultancy.
The trouble is, many haven't grasped the bigger agenda, running the risk of missing out when key funding decisions are made.
"Big decisions will be taken in the context of broader strategic objectives and it is the big strategy which actually soaks up resources," says Babbidge. "Resources which used to go to museum services are now being deployed more towards common priorities."
Brian Hayton, assistant director (cultural services) at Bradford Metropolitan District Council - which hasn't selected museum visits as an indicator - agrees that local authority museum leaders should be thinking much harder about where they fit in their authority's strategic plans. Those who bemoan the absence of museums as a key indicator for their authority risk being ghettoised, he says.
"But if a museum has nailed its colours to more cross-cutting indicators, it is more able to get museum and cultural issues on the main schedules for a Local Area Agreement," he argues.
Hayton points to Bradford's choice of the indicator NI5, "Satisfaction with the local area", as an example of where museums can highlight their contribution.
"[Bradford's cultural services] stepped in and claimed NI5 as our own when everyone else in the authority has shied away from it because it's vague. We argue that you can measure 'satisfaction with an area' by satisfaction with, for example, museums, parks or theatres. You can then say to the council that if they spend money with museums, that will help with overall satisfaction levels."
In York, the council has also opted against selecting museums as a specific indicator, preferring ones that focus on culture and sport. Janet Barnes, chief executive of York Museums Trust and a member of the cultural partnership for the city, says it's quite hard to find a place for museums in the indicators they have chosen.
"The advice [the cultural partnership] had from councillors was that the wider plan for the city and community strategy is the one we should be concentrating on and not be obsessed by national indicators," says Barnes.
"But you do have a feeling that you are not able to participate fully. It would have been nice to have had a definite heritage or museum or arts one that we could have put our weight behind. However, we try to be positive about it and try to position ourselves to show the contribution we can make in areas like volunteering, for example."
Think strategically
Martyn Allison, national adviser for culture for IDeA, an arm of the Local Government Association, warns that the combination of the economic downturn and a failure to grasp the implications of new strategic thinking in local authorities could have a significant impact on museums' position in local authorities.
"It was clear to me at the Museums Association annual conference that many people working in museums are not sufficiently aware of the wider local government context in which they are now working," Allison says.
"This lack of awareness and the resulting position of the service in Local Area Agreements will have a significant impact on museums' position in councils over the next few years. Given that the pressure on local government finances is now rising, we will see councils prioritising spending on services that reflect their Local Area Agreement priorities."
But Allison says all is by no means lost. "If museum services now seek to address the position and focus on demonstrating locally what they can contribute to Local Area Agreements, they will be in a stronger, more informed position for the next round."
In such tough times, many in the leadership of museums stress the increasing importance of advocacy - not only the ability to argue a case for museums as valuable to society, but to assert the contribution they can make to council and government agendas, social and economic.
"If you can put the case at the right time to the right people, sometimes you can influence those key decisions," says Orr.
The museum director must build alliances across the authority, adds Hayton. "You must make certain that your museum has a lot of other people on its side. Museum directors who just want to defend their own corner are finished in my book."
Julie Nightingale is a freelance journalist.
Northern Ireland is facing a major shake-up in its local authority museums under the Review of Public Administration (RPA), which is to cut the number of councils from 26 to 11.
The restructure was deemed necessary post-devolution, both to reduce costs and because local authorities now have more powers than previously under UK direct rule.
There are currently 38 accredited museums in Northern Ireland, 18 of which are run by local authorities. The change to local authority boundaries is likely to mean that some councils will find themselves responsible for more museums than before, though other authorities could lose all of theirs.
This has major implications for museums and collections policy, says Chris Bailey, chief executive of the Northern Ireland Museums Council (NIMC).
"Sixteen out of the 26 local authorities operate an accredited museum at the moment. Reducing it to 11, based on existing boundaries and the current location of museums, means that two will no longer operate an accredited museum while some will operate more than one in that area.
"It will raise the question: why does a council need four museums in its area, especially as collections policy requires you to set out the scope and scale of your collections and most local authority museums will determine that by geography.
"If they are going to shift to become part of a bigger area, they will have to change their collections policy."
The review also poses a threat to the NIMC itself in that it proposes transferring the body's functions to local authorities.
"Our principle concern is that independent museums will be the primary losers as there will be no umbrella body working with their interests in mind," says Bailey. "If the review is about cost saving, why replace what one body does anyway?"
The Museums Association is holding a one-day conference on how museums and galleries can engage with new agendas in local government on 25 March at Hospitium, Yorkshire Museum, York. www.museumsassociation.org/events/newagendas