Concluding his series on the problems facing our artistic institutions, Peter Popham looks at the V&A: the museum may have a new roof, some glitzy new galleries and a new director, but what and who, at the end of the 20th century, is it for?

You do not get far into the Victoria & Albert Museum's annual report - page four to be precise - before hitting it: the Mission Statement. Superimposed on a photograph of young, multi-ethnic children playing with touch-screen videos set in mahogany frames on a floor of ancient mosaic, it reads, "Mission Statement: The museum exists to increase the understanding and enjoyment of art, craft and design through its collections."

The children, the videos, the blander-than-bland "mission", all epitomise the aspiration and the achievement of Elizabeth Esteve-Coll's years as director. Like all museums today, at least all those that depend on large helpings of public money, the V&A is obsessed with "access" - with getting hold of the proverbial Sun readers, smacking them unconscious and dragging them inside.

Luring children in and keeping them there with the help of videos is one approach. Another is to put on shows like last year's "Street Style", about post-war youth fashions. That was an experiment in access that really worked: it was so well and so lovingly done that no indie kid or raver could bear not to see it, but it was located in the North Court, as far away as possible from the entrance: so, to get to it, they had to traipse all the way through the rest of the museum first.

The children in the Annual Report's photograph are pictured in the Samsung Gallery of Korean Art, one of several exotic fruits of Esteve-Coll's frenetic quest for sponsorship. Others include the Nehru Gallery of Indian Art and the Toshiba Gallery of Japanese Art. More traditional galleries were also opened during her tenure, but the Samsung et al are the most distinctive, and the most wrong-headed. They add a lustre of novelty to the old place - like enlivening a comfortable tweed suit with a row of fluorescent buttons. None of the galleries seems big enough to be authoritative, all are flawed by gimmickry and none really coheres with the vast accumulation of treasures that the museum already houses. These grafts on to the body of the museum have refused to take.

In their fuzziness of direction they are of a piece with the "mission statement". After her appalling first months at the museum, when her purging of unwanted but highly distinguished curators brought down the wrath of the art establishment upon her head, Esteve-Coll played it very cool for the rest of her tenure: seeking out sponsors, looking after the roof, cleaning up the sign posting, balancing the books - and sanctioning an American-style mission statement so worthy that no one could possibly object to it.

But, of course, everyone does object, because it is either right but redundant, or it is plain wrong. "To increase the understanding and enjoyment of art, craft and design" is a skeletal, Ladybird book account of what practically any museum does.

Esteve-Coll's legacy was a successful one in terms of book-balancing, roof-fixing and so on. Thanks to her efforts, a magnificent conservation centre has just been completed on the north of the site. But intellectually she must be judged to have failed, because none of her initiatives suggested that she fully appreciated the size of the quandary that an institution like the V&A confronts at the end of the 20th century. It is not a matter of tacking on glitzy new galleries, nor of entrapping Sun readers. It is a matter of confronting the fact that, after little more than a century of growth, and with a site that is almost completely exploited, the place is full up.

The museum as treasure chest flourished during the heyday of empire, and was bound to go into decline when the empire eventually foundered; the notion of prolonging its life by tapping the formerly plundered - Chinese, Japanese, Indians and so on - for money to make new galleries has a quaint absurdity about it. With both site and purpose exhausted, the museum must either founder and stagnate, or find a new direction.

Enter the new director, Dr Alan Borg, who took up his post in September. If he had "safe pair of hands" tattooed on his forehead it could not be plainer: the heavy, square-framed glasses, the chalk-stripe suit and sober tie suggest a reassuringly expensive Harley Street obstetrician. He comes from 13 years as director of the Imperial War Museum; his first publication (in 1972) was Architectural Sculpture in Romanesque Provence; he has been assistant keeper of the armouries at the Tower of London. A more suitable figure to preside over a period of gentle mouldering and stagnation, could not, you might think, be found.

You would probably be wrong. Dr Borg's hobby is fencing (he was an Oxford blue two years running); he's the author of a work on torture and punishment. He was the first keeper of the Norman Foster-designed Sainsbury Centre for the Visual Arts at the University of East Anglia, a great hangar of a museum that was probably the biggest curatorial challenge in the country when it opened. Borg relished it to the extent that, as director of the Imperial War Museum, he commissioned another work from Foster years later, the Imperial War Museum's new outstation at Duxford.

He is not, in other words, the stuffed shirt he appears, and he has big plans for the V&A which he is already bustling to put into effect. "It's ironical that, during the Eighties, the search for sponsorship led to rather smart new galleries with names like Toshiba," he says, "but the core galleries of British art and design were sadly neglected." One of his most urgent tasks is to put that right, by refurbishing all 16 galleries that house the collection.

The staff have already got a taste of Borg's surprising style. The initial idea was to tackle the galleries one at a time; Borg said no, do them all at once. The staff tell him it will take seven years; he insists that it will only take five. It's estimated that it will cost pounds 25m, and the application for money from the National Heritage Fund of the National Lottery has already gone in.

Money problems are never far from the thoughts of a director of the V&A. Dr Borg excited a flurry of hostile comment when he seemed to suggest that the present system of voluntary contributions should be replaced by a pounds 10 entrance charge. What he says that he said was that middle-class museum-goers could afford pounds 10. He is frankly in favour of charges, however, and against the present lack of clarity. "People prefer to get in for nothing or to be charged," he says. "Ideally a museum like this should be free. In my view it's a choice of evils. Now the charge is voluntary, but quite a lot of the galleries are closed every day. It would be better to charge, and have them open. To charge about the same as the Science or Natural History Museums - about pounds 4 - would not solve our financial problem, but it would make a contribution."

Borg's most ambitious project goes to the heart of the question of how the museum is to develop in the next century. Within the dense, coiled labyrinth of buildings occupying the museum's site, whose immense scale can be grasped from the endlessly troublesome roof, only one open site remains: the boilerhouse on Exhibition Road, which houses only a small huddle of contractors' cabins.

Plans have long been mooted for filling in this final interstice. In Norman Foster's ill-fated Albertopolis proposal for revamping the whole museums area, it was to contain a new structure. For Borg, however, this "Millennium Building", as he calls it, is to be the museum's new centrepiece, rising far higher than Foster planned, and, contrary to present planning agreements, as high as any other building on the site. ("This may require a little discussion with certain parties," he concedes.) In his conception it will confront head-on the problems of a museum like this at the end of the 20th century.

"The Millennium or boilerhouse building will have spaces for the 20th- century permanent collection, and also for the 21st century," he says. "I think, when we come to address something like the 21st century, we need to think about the whole concept of what a museum is. This place is not much more than a hundred years old, and it's full up. It's bursting at the seams. We're entering a new millennium and we've only got one building site. So you've got to think of how to address this whole question of what will make a museum relevant in the 21st or 22nd century. The traditional museum gallery as we know it will probably not be there."

What will we find instead? Dr Borg is not sure yet. "The world has changed in ways that we are trying to address," he says. "The world of decorative arts, which used to be the world of great patrons, is now the world of the Coca-Cola bottle, of mass-market production. We won't be collecting in quite the way we were in the past - physically, you can't."

So how to proceed? For inspiration he goes back to the ideas that fired the founding of the V&A. "We may well be looking much more at something that actually involves artists working in studios, galleries, whatever you call them, and having the whole thing somehow tied into the contemporary art and craft area. In a curious way it would be taking us back to the reason Prince Albert and Henry Cole had for founding this museum: the idea that the arts of the past, both recent and distant, could be used to instruct and inform contemporary art and design."

Now that's more like a mission statement that means something. At the heart of the V&A, at the outset, was a creative objective: to fuel the brains, taste and imagination of Britain's new designers by exposing them to the vast array of what their forebears had accomplished. It was an objective that, in the twists and turns of the museum's history, was frequently lost sight of, as the V&A became yet another huge sarcophagus for imperial plunder. But with the Royal College of Art, only a short walk away, still running joint MA courses with the museum on design, conservation and the Renaissance, the relationship is still vestigially intact.

In ways that are not yet clear - even to him, one suspects - Borg hopes to build on that. "Universities are never dull places because they have a constant throughput of young people," he says. "That's what a museum like this needs."

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