Chancellor gives more to culture but expects ‘efficiency savings’ to be made

The Department for Culture, Media and Sport (DCMS), which funds England’s museums and galleries, has received a modest increase in …
Jane Morris
The Department for Culture, Media and Sport (DCMS), which funds England's museums and galleries, has received a modest increase in its grant, but less than the average increase in departmental spending as part of the Comprehensive Spending Review.

Gordon Brown, the chancellor of the exchequer, announced that the funding for DCMS will rise from £1.4bn this year, to £1.64bn in 2007/08 - an increase of 2.3 per cent in real terms. The average departmental spending increase is 4.2 per cent in real terms, from a total of £297bn to £340bn in 2007/08.

The results are better than many people expected, with standstill grants for departments other than education and health widely predicted prior to the announcement. Museums and galleries have done well, with support for three particular initiatives announced by the Treasury in advance of the detailed breakdown, which will be provided by the DCMS in the autumn.

The announcements are:
o Renaissance in the Regions will be extended from three English regions to all nine
o VAT relief will be extended to all university museums
o the National Heritage Memorial Fund will be doubled to £10m by 2007/08.

Chris Batt, the chief executive of the Museums, Libraries and Archives Council (MLA), said: 'It was significant that Renaissance was mentioned in the white paper: we would have been very disappointed if there was no mention, though we have to wait until the autumn to see what the precise amount of money will be.' He added that he believed the announcement commits the government to extending the Renaissance scheme to all nine regions by 2007/8.

Mark Taylor, the director of the Museums Association, said he was 'very encouraged about the various mentions', though he had some concerns if the extra amount of money allocated to Renaissance turned out to be small.

The department for culture's money has not come without strings attached. The Treasury is demanding that the DCMS, and its sponsored bodies, comes up with a minimum of £260m 'efficiency savings' by 2007/08 - at least half of which must be real cash savings, not simply a case of demonstrating extra productivity from the same amount of funding.

The review will include:
o the loss of 30 civil services posts (from a total of about 400), plus the relocation of 600 posts in sponsored bodies out of London. So, for example, the department may look at moving staff from bodies such as English Heritage or the MLA out of London
o examining the 'back office' functions of sponsored bodies (finance, human resources etc) to see if mergers would create efficiency. Could groups of national museums share payroll functions, for example? Could there be greater sharing of stores?
o making efficiency gains of £146m within local authority expenditure on culture and leisure (much of this appears to be aimed at libraries).

The Treasury has also performed a small sleight of hand with the starting budgets for the next spending round (2005/06). In the 2002 spending review the Treasury said the department would have had £1.585bn in 2005/06. This has been reduced in this announcement to £1.543bn, a result of changes in accounting.

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