Recommendation 6

The Department does not have the necessary insights into museums and galleries to give it sufficient early warning of their potential financial failure. The Department’s line of sight of museums’ and galleries’ finances and financial management capabilities is via quarterly partnership meetings and its receipt of copies of museums’ and galleries’ financial data and risk registers. The Department recognises that it must rely less on anecdotal evidence in discussions with museums and galleries, and use more systematic indicators and be more joined- up in its own workings. It is reviewing its key performance indicators for all its arm’s length bodies, including museums and galleries, to address weaknesses identified by the National Audit Office, such as its failure to measure museums’ and galleries’ financial management capabilities systematically, and ensure its new indicators cover both financial resilience and wider aspect of museum and gallery performance. It is also finalising a new strategic indicator tool, which will draw on its new indicators to give a more complete and joined-up assessment of the situation of each museum or gallery. It intends to have the new indicators and tool in place later this year. Although the implementation of these measures should provide the Department with early warnings of potential financial failure, it has yet to decide on its willingness to allow such failure. recommendation The Department should: a. Put in place the key performance indicators and tools that it will use to track the financial resilience of museums and galleries by the end of the 2026–27 financial year. This should include metrics to improve its insight into their financial management capabilities; and b. Set out the circumstances in which it would allow the financial failure of a museum or gallery. 6 1 Department oversight Introduction