Museums: after the Lottery boom
National Lottery cash for museums was justified in terms of increased visitors. But do the sums add up?
- Visits to major London museums and galleries soared after 2000, as a result of investment from the National Lottery and Labour’s free admission policy.
- The average total cost of each new visit is as much as £10, with the lottery contributing up to £4.
- The most successful museums opened new lottery-funded buildings and introduced free admission. Those that did neither saw visit numbers fall. Is the new cultural funding working for the public good?
Funding for major London museums and galleries has increased enormously in recent years – with hundreds of millions of pounds worth of capital developments funded by the National Lottery, and tens of millions of extra revenue per year to fund free admission to the national museums. In a recent research project, we studied the relationship between this additional funding, and museum attendances. The extra money has led to extra visits – but what do those visits cost?
Until the National Lottery started in 1994, UK museums and galleries found it hard to raise money for capital developments and refurbishments – and were looking noticeably tatty and tired compared to museums in Europe and north America.
From 1994 to 2003, over £12billion was allocated to good causes by the National Lottery distributors (1). Of particular importance to museums has been the Heritage Lottery Fund (HLF) – between 1994 and 2004 it awarded over £1billion to over 600 museums, about a third of its total spend (2). Museums and galleries have also benefited from awards made by other lottery distributors, particularly the Millennium Commission and the Arts Councils of England, Wales, Scotland and Northern Ireland.
That funding has enabled a number of museums and galleries to be extended and extensively refurbished. A small number of new museums and galleries have also opened with lottery support.
Visitors were central to justifications for lottery funding. Almost all museum business plans for lottery applications projected increased attendances. Several museums planning lottery projects proposed to increase their income from admission charges; others proposed increasing visitor spending through their shops and catering outlets (3). Indeed, several lottery-funded projects included the development or enhancement of catering or retail facilities as part of their capital improvements – such as the National Portrait Gallery’s Portrait Restaurant and Tate Britain’s shop. But can all those millions of lottery funding be justified in those terms?
The year 2000 was something of a boom year for museums – especially museums in London, which were considered to have taken the lion’s share of lottery funding (4). The then culture secretary referred to the period as an ‘unprecedented season of openings’ (5). That year alone saw eight lottery-funded projects in major London museums and galleries opening at a total cost of £379million, over half of which came from the lottery (£193million). The most prominent were Tate Modern, on the banks of the Thames, costing £134million (£56million from lottery sources); and the Great Court, a new public space at the heart of the British Museum, which cost £110million (£46million from lottery sources).
A great deal was expected of these and other museums’ lottery-funded projects. But doubts were cast on organisations’ ability to sustain their lottery-funded developments (6), and it was revealed by an ex-employee of the HLF that inadequate effort had been made by HLF to question some of the inflated visit projections in the business plans of projects that it had agreed to support (7). Three years on, press reports were suggesting that at least one high-profile museum lottery project, the New Art Gallery Walsall, faced an uncertain future (8), and several other museum projects are reportedly not delivering the increased numbers of visits anticipated.
DCMS regards the major developments at its sponsored museums as having ‘…been instrumental in helping to attract new visitors’ (9). But, despite its commitment to extend access to both national and regional museums and galleries (10), the DCMS has never publicly reported on what difference those lottery projects have made, or are making, or indeed who is benefiting from them.
Consequently, we decided to look into the relationship between lottery-funded capital developments and museum attendances. We chose to focus on London, and on projects that had opened in 2000. Our aim was to analyse attendance data from major London museums and galleries (which we defined as having over 100,000 visits per year), and we looked at institutions both with and without lottery-funded capital developments to see differences in patterns of attendance. We undertook analysis on data from 31 museums and galleries and five art exhibition venues (11) (these are listed in Tables 1 and 2).
The impact of lottery funding on visitor figures
So as to not be swayed by the initial boom experienced in 2000 (12), we compared attendances in 1999/00 with those in 2001/02 and 2002/03. This period, however, is also marked by the introduction of free admission at many national museums. (One methodological problem was disentangling the impact of lottery-funded developments from that of free admission. Other problems included the questionable accuracy of some admissions statistics, and the difficulty of determining the relationship between the number of visits and the number of distinct visitors.)
Table 3 summarises the changes in visit numbers at the London museums and galleries in our sample. Between 1999/00 and 2001/02 these rose by 5.1 million visits (21 per cent). This increase was more than sustained in 2002/03, when attendances were up 7.6 million visits on 1999/00 figures, a 32 per cent rise. Much of this increase is due to free admission, but there are clear differences in performance between museums with lottery-funded capital developments and those without.
These additional visits were predominantly accounted for by museums and galleries with lottery-funded capital developments opening between April 2000 and March 2001. In 2001/02 these received 5.3million additional visits compared to 1999/00. In 2002/03 these museums recorded 6.6million visits more than in 1999/00 (an increase of 88 per cent). In stark contrast, attendances at museums without lottery developments have been steady declining throughout the years covered by Table 3 – falling by seven per cent by 2001/02, and by 13 per cent by 2002/03.
The impact of Tate Modern
Subjecting the attendance data to closer scrutiny (Table 4) reveals that 3.9million of the 5.1million extra visits to London museums in 2001/02 could be attributed to the new museums that opened between April 2000 and March 2001 with lottery funding. Of these, as many as 3.8million (74 per cent of the total increase) could be attributed to Tate Modern alone. But by 2002/03 those new museums’ share in the total number of additional visits had already fallen: of the 7.6million additional visits to museums in London, these accounted for 4.4million (57 per cent of the total increase), almost all of which were attributable to Tate Modern.
If these newly opened museums are discounted, the picture still shows attendance at existing museums with lottery-funded projects opening between April 2000 and March 2001 climbing steadily. Between 1999/00 and 2001/02 these increased by 1.4million (19 per cent). By 2002/03 these had risen by 2.1million (29 per cent) on 1999/00. This is a significantly better performance than the museums without lottery developments, which fell 13 per cent over the same period.
The impact of free admission
Table 4 shows the very considerable variation in attendance at the existing museums which had lottery-funded capital developments opening between April 2000 and March 2001. All reported more visits in 2002/03 than in 1999/00, but in the majority of cases, these were actually lower than they had been in 2001/02. In fact, the only museums in this group that increased attendances between 2001/02 and 2002/03 were those that also introduced free admission – namely, the Imperial War Museum and the Science Museum.
Free admission, introduced in a number of previously charging, nationally funded museums in 2001, had a major impact on visitor figures. Free admission for all visitors was introduced at the V&A and the Theatre Museum in November 2001; at the Imperial War Museum, the National Maritime Museum, the Natural History Museum, the Science Museum and the Museum of London in December 2001 (13). The Royal Air Force Museum also introduced free admission for all in December 2001.
Table 5 distinguishes between attendance at the previously charging nationals and at those that were already free. It shows that the newly free museums saw attendance soar. Between November 2001 and March 2002 attendances increased between 72 per cent and 82 per cent on the same months in the previous year, and continued to rise until February 2003.
So the impact of free admission was immediate and impressive. The V&A saw attendances increase from 75,773 in November 2000 to 132,882 in November 2001. Remarkably, this 75 per cent increase was recorded even though free admission was not introduced until 22 November (14). (The V&A’s new lottery-funded British Galleries opened at the same time.) The V&A’s attendance increased even more over the subsequent months – by 159 per cent in December 2001 and by 270 per cent in March 2002.
One year on from the introduction of free admission (November 2001 to December 2002), attendances were up at all the museums that introduced free admission. These ranged from an 11 per cent increase at the Imperial War Museum to a 111 per cent increase at the V&A. The Science Museum’s visits went up 100 per cent, and the Natural History Museum’s by 81 per cent. Overall, attendances at all DCMS museums introducing free admission – including those outside London – increased by 69 per cent (15).
Two years on (November 2002 to December 2003) – visits were up by 72 per cent at the former charging museums. This represents 5.6 million more visits than in 2001. Admissions to the Science Museum went up by 120 per cent; those at the V&A by 117 per cent; and those at the Natural History Museum by 74 per cent (16).
The combined impact of free admission and the lottery
Table 6 focuses on attendance at the formerly charging museums that introduced free admission between November and December 2001. All those with lottery-funded developments saw their attendances increase by between 32 per cent and 156 per cent from 1999/00 to 2002/03. The picture is far less good for those without lottery developments. Although attendances at the RAF Museum rose significantly, complementing what had been an upward trend since 1999/00, not all museums fared so well. The Museum of London’s attendances rose by only two per cent from 1999/00 to 2002/03 and the Theatre Museum’s attendances fell by five per cent.
The relationship between capital investment and increased visit numbers
Increases in attendance certainly don’t come free of charge, and as part of our research we looked at what extra visits cost. This type of calculation is unusual in museums, and there are questions about whether it’s appropriate to calculate financial costs per head at all.
We undertook two sets of calculations, using different assumptions, one designed to determine the maximum cost that it’s reasonable to attribute to each new visit, and one designed to determine the minimum cost.
One approach to considering the relationship between capital investment and increased visit numbers is to calculate the capital cost of each extra visit. The benefits of capital investment will continue for far longer than the year in which the capital development first opens, so it’s necessary to spread the cost of capital development over several years.
For the maximum cost calculations we took a fairly common period of return on the capital investment of 10 years, and attributed the entire cost of the capital expenditure to new visits. We charged 10 per cent of the capital cost each year – so £37.9 million of the £379million-worth of capital developments opening in 2000/01 is charged per year.
On this basis, the capital cost of the extra 4.9million visits in 2000/01 was £37.9million. This gives an annual capital cost per extra visit in that year of £7.78 (ie £37.9million/4.9million), of which £3.96 is from the lottery. In 2001/02 there were an extra 5.1million visits (over the 1999/000 baseline), the capital costs of which were £44.2million, giving a capital cost per extra visit of £8.71. These calculations are shown in table 7.
These figures obviously disguise the fact that the maximum cost per extra visit varies enormously between museums. At Tate Modern, for example, the average capital cost per visit is around £3.50 (£13.4million for 3.8million visits in 2001/2002), of which about £1.50 comes from the lottery. In contrast, at the Gilbert Collection the cost per visit in 2001/2002 is £33 (£3.1million for 93,000 visits), all of which was met by the lottery (17). Among existing museums, the average capital cost per extra visit in 2001/02 at the British Museum is around £31 (£11million for 360,000 extra visits) – a similar amount to the Gilbert Collection. However, in the case of the British Museum, only part of that cost (around £13) came from the lottery. At the National Portrait Gallery, the cost per extra visit is much lower at £3.30 (£1.6million for 480,000 extra visits), of which about £2.50 came from the lottery. These figures are all calculated using the maximum cost assumptions.
For the minimum cost per visit calculations, we spread the cost of capital over 25 years, therefore charging four per cent of the capital cost per year (18). In addition, only one third of the capital cost is attributed to new visitors, on the basis that capital investment was intended for reasons other than to increase visit numbers. These might include: to address long-term maintenance backlogs; improve the environmental conditions in which the collection is displayed and stored; contribute to economic and social regeneration; improve the quality and enjoyment of the visit for all visitors; provide better learning opportunities and improve the care of important historic buildings.
On that basis, it could be argued that it would be misleading to judge the success of the investment just in relation to the increase in visitors. For example, the investment in the Gilbert Collection meant that a collection was secured for London that might otherwise have been given to a city outside the UK. And the investment in the British Museum’s Great Court was intended to improve the experience for all visitors, rather than simply generate more visits.
On these minimum cost assumptions, the overall capital cost per extra visit in 2000/01 was £1.04, of which £0.53 came from the lottery. In 2001/02 the capital cost per visit was £1.16.
We can also cost in the price of introducing free admission at previously charging museums. Based on DCMS figures, we estimate that the additional cost of introducing free admission at museums in our sample for 2002/3 (the first full year of free admission) is in the region of £20million. This excludes the loss of VAT income to government from museums, resulting from a change in VAT regulations that was a major consideration in the introduction of free admission (19).
DCMS has stated that key to its policy of extending free admission was ‘to ensure that from its opening in May 2000 the new Tate Modern…would offer free access to visitors’ (20). It is, therefore, reasonable to add the £5 million grant made to Tate specifically for this purpose in 2000/01, after which the cost increased to about £7 million for 2001/2 and 2002/3 (21). This gives a total increase in DCMS revenue funding for the cost of free admission of approximately £27million in 2002/3 compared to 1999/2000.
Given that the increase in visits over that period was approximately 7.6million (Table 7), this gives a revenue cost per extra visit of £3.56.
Adding this to the total annual capital cost per visit gives a maximum total cost per extra visit of £9.57 in 2002/03. Of this £6.70 (£3.14 + £3.56) came from the lottery or DCMS. The minimum total cost per extra visit was £4.36, of which £3.98 came from the lottery or DCMS.
So, depending on the assumptions made, the average cost to the lottery per extra visit to major London museums is between 50p and £4.00 – though the cost varies enormously between different institutions. If the cost of introducing free admission is also taken into account, then the average total cost from all sources of each additional visit is between £4.00 and £10.00.
The calculations made above are necessarily crude. Nevertheless, the figures that we’ve come up with raise some important questions about how large allocations of lottery and other public funding are justified. Given that lottery funding is ultimately defended on the basis of public benefit, is there some sense in which the £2.50 per visit at the National Portrait Gallery is better value for money than the £33 cost per visit at the Gilbert Collection?
Within some parts of the cultural sector, it’s invidious to even suggest such comparisons. But it is surprising to us that nobody has ever asked these questions or published any analyses that enable these questions to be asked. This is especially strange given government’s obsession with measuring the value of culture (see Measuring culture, by Sara Selwood), and with increasing the audience for museums and galleries.
Museums themselves are not always fully informed about the various factors that impact on their attendances. There are enormous difficulties associated with identifying effects and attributing them to certain causes. Our research exposed how very little we know or understand about the quantitative impacts of an investment of approximately half a billion pounds. It goes without saying that we know even less about the qualitative effects that are routinely claimed such as learning, social inclusion and preservation of historic assets for future generations.
Many argue that factors such as quality of experience, the existence of art, or contribution to research and scholarship, are more important than numbers. But using numbers constructively in policy and management is still in its infancy. We believe there is potential to undertake more quantitative research and analysis to improve decision-making both at the level of policy and within individual museums.
Sara Selwood is head of department of cultural policy and management at City University and editor of the journal Cultural Trends. Maurice Davies is deputy director of the Museums Association.
A longer version of this paper is published in the journal Curator in autumn 2005
(1) Good Causes Portal
(2) ‘Museums and Galleries: 10 years of heritage lottery funding’, Heritage Lottery Fund, 2005. However, this was not all for buildings; for example, some went on acquisitions and some went on education projects. The vast majority – £700m – was for all kinds of construction projects including extensions, new buildings and refurbishment’
(3) Other sources of projected increased revenue income included increased revenue funding from museums’ parent bodies such as universities or local government; increased income from ‘corporate hire’ or from commercial business development on land owned by the museum, for example the newly created Lowry which anticipated an income stream from its neighbouring shopping centre, the Galleria (‘Lowry’s handout fury. Outrage as town hall gives £650,000 to arts complex’, Neal Keeling, Manchester Evening News, 17 April, 2001).
(4) Lottery projects paint ugly picture of London bias, Vanessa Thorpe and Tracy McVeigh, Observer, 9 July 2000
(5) ‘Season of millennium museum project openings most impressive ever seen in UK’, Department for Culture, Media and Sport, 20 January 2000
(6) ‘UK Museums; safe and sound?’, Cultural Trends 37, Adrian Babbidge, 2000
(7) ‘Lottery visitor figures are more than 50 per cent off target’, Museums Journal, Jane Morris 2000
(8) ‘Lack of funds and leadership leaves New Art Gallery Walsall in dire straits’, Felicity Heywood, Museums Journal, January 2004
(9) ‘National Museums and Galleries: Funding and Free Admission’, first report of session 2002-2003, House of Commons Culture, Media and Sport Committee
(10) ‘National Museums and Galleries: Funding and Free Admission’, first report of session 2002-2003, House of Commons Culture, Media and Sport Committee
(11) Galleries that host only temporary art exhibitions (and are referred to here as ‘art exhibition venues’) have been treated as a separate category and are not analysed as part of the main group which is characterised by the fact that they possess and display permanent collections.
(12) See for example the decline in attendances at new museums with lottery developments from 2000/01 to 2001/02 shown in Table 3.
(13) ‘National Museums and Galleries: Funding and Free Admission’, first report of session 2002-2003, House of Commons Culture, Media and Sport Committee
(14) In Table 5, the sheer number of visits to the V&A masks lower attendance at those museums which did not introduce free admission until December. In November 2001, for instance, the Natural History Museum’s visits were down 16 per cent on the previous year, and the Science Museum’s by 18 per cent.
(15) ‘One Year On – Visitor Numbers Soaring At National Museums Following Abolition Of Entry Charges’, Department for Culture, Media and Sport, 1 January 2003
(16) ‘Two Years On – Free Admission to National Museums Draws Even Bigger Crowds’, Department for Culture, Media and Sport, 9 March 2003
(17) This includes the grant of £10 million from HLF for an endowment as, effectively, it represents capital expenditure of lottery money. If the endowment is excluded the cost per visit is £23.
(18) The basis for selecting a 25 year period is that in its agreements with museums for awards of more than £500,000 HLF requires grant recipients to agree that they will continue to provide the benefits from the HLF capital investment for 25 years. Some of the first lottery grants did not specify a fixed life – and so could be assumed to have benefits for infinity (correspondence with with Stephen Johnson, Heritage Lottery Fund, 2 September 2004 and 21 September 2004)
(19) The cost to government of the change in VAT regulations varies from year to year but is likely to account for several million pounds per year.
(20) ‘National Museums and Galleries: Funding and Free Admission’, first report of session 2002-2003, House of Commons Culture, Media and Sport Committee
(21) Actual and planned DCMS funding for the Tate group was: 1999/2000: £19.7 million; 2000/01: £24.9 million (including extra funds so Tate Modern could open free of charge); 2001/02: £26.9 million; 2003/02: £27 million. Annual Report, Department for Culture, Media and Sport, 2001