The Annual Report 2001

This was the first year of the new funding agreement with the Department for Culture, Media and Sport (DCMS), which provides assured levels of grant-in-aid for the three-year duration of the agreement, subject to the Museum meeting its performance targets.

Grant-in-aid totalled £32.4 million – 83 per cent of our net available funding for the year. Baseline grant–in–aid amounted to £28.9 million, to which DCMS contributed a further £3.5 million as compensation for loss of admissions income following the withdrawal of entry charges for all adults (entry was free for children and over 60s previously) from 1 December 2001. The impact of free entry on admissions revenue was softened by the success of charging for exhibitions such as Predators – these generated £0.3 million in the final four months of the year.

Baseline grant-in-aid is fixed at £28.9 million until the funding agreement ends in 2004, with no allowance for inflation. An additional £6.7 million is provided in 2002–2003 to compensate for the full- year impact of the introduction of free admission. We remain concerned that inflation will reduce the real level of grant-in-aid and we are therefore maintaining our prudent approach to capital expenditure. During 2001–2002 capital expenditure fell to £6.1 million, which mostly comprised costs associated with Phase One of the Darwin Centre.