Renewed financial crisis at British Museum raises question of blame

High-profile debacles mask huge fall in funding levels

Since a scathing report revealed six years ago that the British Museum did not employ a single accountant, a giant question mark has hovered over any discussion of its finances and governance.

And with the financial position deteriorating, the question of who is to blame will once again be asked.

The recent debacle over the museum's failure to spot that the wrong type of stone was used for the Great Court development makes it tempting to conclude that the management still has not got its eye on the ball.

Some museum observers suspect that the British Museum comes nowhere near the tight financial ship of, for example, the Tate.

But the fundamental problem remains that the British Museum has genuinely seen a fall in funding of about 30 per cent in real terms in the past decade. It has an annual budget of £45m; £36m comes from government grants and it must raise the difference itself.

Every museum and gallery is now accustomed to raising sponsorship for exhibitions and hauling in the benefactors for important developments. But it is also dependent on revenue from visitors.

And in the past year, the British Museum has experienced a surprise downturn in visitor numbers that has already cost it £1m in lost income from the shops and café – money that had already been budgeted for.

Visitor numbers to the British Museum, in Bloomsbury, had hovered around the 5.5 million mark for years, but it was thought the dramatic new Great Court – covering the central courtyard with an extraordinary glass roof – would tip the total above 6 million.

But numbers slumped to 4.6 million, a fall also suffered by the Tower of London and other attractions popular with foreign tourists.

Bad publicity for Britain from the foot-and-mouth epidemic last year and fears of travelling after the terror attacks on America on 11 September were blamed.

The Great Court itself added to the problems, with extra staffing and running costs higher than expected.

In January the museum served warning that it may have to close galleries and lay off staff to deal with a projected £5m deficit by the year 2004-05. It shelved plans for an £80m annexe and said cutting the number of exhibitions and opening hours for permanent collections were options.

It launched a review of the finances. Details of the review emerged yesterday in an interview given by Christopher Jones, the acting accounting officer, to the respected scholarly journal The Art Newspaper.

The need for savings of £3m a year announced last autumn has now doubled to £6m because the predicted deficit has risen to £6.5m by 2004-05.

A museum spokesman said that taking into account possible increases in inflation and changes to factors such as national insurance, it was a "realistic" figure "rather than just addressing the lowest possible figure. We must have an operating margin."

The museum, which will celebrate its 250th anniversary next year, has long been seen as less forward-looking than many of its rivals. Until very recently it still had a typing pool and a ladies' shoe allowance. But it has undoubtedly shaken up its act since the damning criticisms of the way its finances were controlled in 1996.

Terry Adams, of the Public and Commercial Services Union, which represents about 500 of the staff, said it was the Government, not the museum, that had to act.

"This Government has raised the profile of cultural activities but it has done so on the cheap. It must intervene to secure the museum's future and full and proper access to its national treasures."