Recommendation 5

The Department’s current funding regime risks not providing museums and galleries with sufficient incentives to support themselves financially. The Department recognises the importance of providing museums and galleries with incentives to maximise opportunities for raising their own income, while also receiving grant-in-aid, as a way of improving their financial resilience. It views museums and galleries as incredibly motivated to raise their own income and now sees their financial resilience as less risky than it was, although still rated as yellow-flashing. However, the Department’s usual approach of providing flat rate annual increases in museums’ and galleries’ funding at the start of the year, with additional top-ups later on for those in financial trouble, could provide museums and galleries with insufficient incentive to maximise self-generated income or operate efficiently. One potential source of extra income would be for museums and galleries to charge international visitors. The Department will look with museums and galleries at this option, but cautioned that introducing such a measure would require great care. recommendation The Department should review the funding regime to identify how it can better incentivise the long-term commercial growth of the museums and galleries. Once this review is completed, it should write to us with its findings. 5