Budget 2021 – reaction from AIM Director, Lisa Ollerhead

Yesterday marked an important step in rebuilding stability following the upheavals of Brexit and Covid: the announcement of the multi-year comprehensive spending review delayed in 2019 and 2020, alongside an Autumn Budget. These Government fiscal events set out how the Government will spend public money for the coming years, including both big policy announcements and set-piece spending and the day-to-day budgets of Government departments including the Department for Digital, Culture, Media and Sport which funds Arts Council England, Historic England, the National Lottery Heritage Fund, and the 15 DCMS-sponsored museums and galleries.

It was widely expected to be an exceptionally tough spending round, given the blown budgets over the last eighteen months of the pandemic. On the face of it, museums and heritage have done reasonably well in an environment with high demand for spending and continued headwinds from global uncertainty and rising cost of living – although typically it takes several days if not weeks for the full impact of a spending review to be understood.

As usual, much of the cultural spending comes in the form of capital. AIM’s main ask to DCMS has been fulfilled in the rest of Museum Estates and Development Fund (MEND) for repairs to regional museums confirmed at around £65m. The Levelling Up Fund will also support a number of museums and heritage projects around the UK (congratulations to members involved in the successful bids!) showcasing increasing understanding across Government of how culture enriches communities, improves wellbeing, and contributes to growth.

Tax – always a favourite subject at AIM Towers – also saw some favourable announcements. Answering long-standing calls from AIM and other sector bodies, the Museums and Galleries Tax Relief which supports permanent and temporary exhibitions will be extended, and until March 2023 at increased rates (i.e. more money back to the museum for the same amount of expenditure). However, it does look like the relief is set to end in 2024, so work will continue to persuade HM Treasury and HM Revenue and Customs for it to join the other cultural tax reliefs and be offered permanently. We also expect museums to benefit from business rates cuts for retail, hospitality and leisure, and continue to work with other sector bodies to advocate for museums to be treated fairly and consistently in the business rates regime.

There are reasons for caution. DCMS will see a small uplift in revenue funding in the next three years but we await news of how this will affect Arts Council England and their ability to spend on museums inside and outside the national portfolio. And the national museums will see strong capital investment, including £300m for their maintenance backlogs and £125m confirmed for the Natural History Museum at Harwell, and increased budgets in the next two years to help ongoing Covid recovery: funding levels the Arts Council is unlikely to be able to match for non-sponsored museums.

However, as we know, independent museums are not necessarily affected by public spending. It’s more important that members of the public are able to visit independent museums as residents, daytrippers, and domestic tourists. There were some encouraging moves to leave more money in people’s pockets, including an increase to the minimum wage – although the Institute for Fiscal Studies warned that many parts of the public still face a squeeze on living standards. Over the coming months AIM will continue working to support independent museums to attract visitors back, run efficient organisations, and prosper.

You can read a more detailed overview of what the budget means for charities from CFG. Click here to read CFG’s budget overview>>

To learn more about what fiscal events mean for you and your museum, look out for our forthcoming Hallmarks at Home introduction to government and culture. You can see all our forthcoming events on our events page here, or you can sign up to our regular eNews here to be the first to hear about events.

Let me know your thoughts on what the CSR has done for you on lisa.ollerhead@aim-museums.co.uk.