Autumn budget offers little support for museum sector

While there were no announcements related specifically to museums and galleries in John Healey’s first budget as chancellor this week, there were a number of measures that will impact the sector.

Local government funding

The news that there will be no overall funding increase for local government is likely to impact civic museums. 

Eamonn O’Brien, chair of the Local Government Association, which represents councils, said: “Extra funding to tackle rough sleeping and for social housing is positive. However, no overall funding increase for local government means councils will continue to struggle to meet demand and provide services to our communities.”

O'Brien called for a new deal for local government, and said: "“Government recognises that councils are central to achieving good growth and rewiring the state. These ambitions cannot be achieved if council finances remain fragile and reliant on emergency bailout agreements.

“The full value of local government will only be unleashed if both local and strategic authorities are empowered and financially sustainable. Plans for real fiscal devolution must ensure investment decisions can better meet local needs."

Devolution

Chancellor Healey did make a number of announcements about devolution that could impact museums and galleries funded by local authorities in England.

“People who know their places best should have more power to shape their future,” Healey said. “The budget sets out a roadmap to fiscal devolution, delivering the biggest transfer of power and resources in a generation and giving local leaders greater control to drive growth in their communities.”

The new devolution agreements announced by the chancellor will mean that that over 90% of England’s population will have a devolution agreement in place, with all of the north of England covered by mayoral devolution for the first time.

The devolution measures also include legislation to give all Strategic Authorities the power to introduce an Overnight Visitor Levy. However, there will be no ringfencing for cultural funding under the levy plans.

New funding

The government will continue to support local projects across the UK through a new £80m Local Renewal Fund to support job creation, invest in local economic regeneration, maintain heritage assets and back local initiatives that boost economic growth.

There will also be £125m to support 60 English local authorities to transform buildings into what their communities need, from health centres to civic spaces, through the new Derelict Buildings Fund, and supporting local authorities to revitalise their high streets through the High Streets Strategy.

And in the field of technology, the government announced that it will invest £700m to tackle the risks of AI while also investing in AI development. 

AI Minister Kanishka Narayan said: “As AI becomes more powerful, Britain must have the capabilities to protect its people and shape its own future. That means staying ahead of emerging threats, from cyber attacks to biological risks, while building more of the critical technology our security depends on.

“We cannot afford to rely entirely on technology built overseas. By backing British science, advanced chips and our own AI companies, we can strengthen our national security, rebuild Britain’s industrial strength and create good, skilled jobs across the country.”

Wages

Some museums will be impacted by the 3.9% increase to the National Living Wage and the National Minimum Wage announced by the chancellor. From April 2027, the National Living Wage will be to £13.21 per hour and the National Minimum Wage for 18-20-year-olds will be £11.27 per hour.

VAT relief

The budget included a move to ease of the cost-of-living burden, with the news that VAT will be removed from household electricity bills until the end of July 2027 (previously the end of March).

Small businesses and charities that already qualify for the reduced 5% VAT rate on electricity, including through the existing VAT certificate and declaration process, will also benefit from the 0% rate this winter.