Exclusive:National Galleries struggles to balance books despite cutting dozens of jobs in face of costs crisis
The organisation, which has warned of a “very challenging” financial outlook, has revealed that 43 posts have already been lost through voluntary redundancies as it battles with the impact of rising costs and public sector pay policies.
Senior officials at the organisation, which is responsible for some of Edinburgh's most popular attractions and many of Scotland’s most important art treasures, have warned it is now at the "minimum resource level needed to care for and provide access to the national collection."
It has raised the prospect of having to scale back its programming or close galleries less than a year after reopening the Modern Two building after a six month shutdown due to a projected deficit and the impact of the Scottish Government’s budget.
It has argued the government to “shift the dial” in its support for the cultural sector and help ensure its collections can be seen across Scotland and not just in Edinburgh, where it runs the National Gallery, the Portrait Gallery and the Gallery of Modern Art.
Although the National Galleries has been allocated £26m out of the £196m set aside for arts spending in the forthcoming financial year, it has insisted that its core funding is now “covering less and less” of what visitors see when they walk through its doors.
Its dossier for Holyrood also warns that its funding no longer covers the cost of running its flagship galleries due to a 72 per cent increase in its energy bills over the last two years.
The National Galleries has forecast that around 95 per cent of its direct funding will have to be spent on salary costs in the forthcoming financial year.
It has revealed that the government is demanding further “efficiency savings” are made to cut around five per cent from its running costs.
The National Galleries dossier, compiled by finance director Donella Steel and Elaine Anderson, head of governance and compliance, said a “minor increase” in funding earmarked in the Scottish Budget was intended to cover a public sector pay deal agreed by the government.
Their report states: “The budget settlement, including a five per cent efficiency reduction, leaves the National Galleries in a deficit position and it will be very challenging to find a path to a balanced budget.
“The grant-in-aid received by the National Galleries is supplemented by self-generated income.
“Government funding is now covering less and less of the activity we undertake and what the public sees when they visit our sites.
“If we do not do exhibitions, for example, then we do not benefit from the exhibition tax credit, which has been and continues to be so helpful. If we do not have people coming through the doors and we do not get donations, then we do not get gift aid.
“Membership, which has been an important form of income for us, is highly dependent on the programming on offer. A dynamic and varied programme can be an incentive toward paid membership, but a reduced programme and/or gallery closures, for example, does not encourage people to become members.
"For 2024/25, 95 per of our grant in aid is forecast to go on salary costs. The remaining five per cent does not cover the cost of managing and running our estate, including increased utility costs for environmentally-controlled buildings needed to care for the national collection.”
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