The Natural History Museum Annual Report
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Our principal source of funding
continues to be the UK Government, which provides grant-in-aid under a
three-year agreement and special payments for essential capital projects.
Grant-in-aid accounted for 91% of our available funding for the year –
the balance came from admission charges for special exhibitions, sponsorship
and donations, and commercial activities.
This was the second year of the current three-year funding agreement,
which requires that we meet a series of performance targets in return
for assured levels of financial support. We received £28.9 million
in baseline grant-in-aid, with a further £6.7 million to compensate
for the loss of revenue that followed the introduction of free entry for
all adults in December 2001.
During the year we signed a revised Financial Memorandum, which sets out
key financial principles, and a new Management Statement, which defines
our relationship with the Department for Culture, Media and Sport (DCMS).
We value our relationship with our sponsoring body and intend to work
closely with DCMS to review and strengthen this further.
We continued to focus
on efficiency savings across our organization, and to maximize revenue
from non-Government sources. Following the introduction of free entry,
we are generating income from our special exhibitions, and retailing revenue
has increased, although spending per head declined. Income from retailing
also increased, though spending per head declined. Staff, infrastructure
and other costs rose.
DCMS is providing additional funding for our capital programme. We received
the first £2.5 million of the £6 million grant-in-aid for
refurbishing the Palaeontology Building. £2.5 million has been awarded
for Darwin Centre Phase Two in the next funding agreement, which commences
in the 2003/04 financial year. We incurred further capital costs of £0.9
million for the first stage of the replacement of the Museum’s IT
We are most grateful to the Government for its support during a year of
change and renewal for the Museum. However, we have concerns about the
levels of funding going forward. Taking the effects of inflation into
account, the real level of grant-in-aid is continuing to fall. As we reported
to the House of Lords Select Committee for Science and Technology, our
grant-in-aid has decreased in real terms by 27% in the decade since the
Committee last reported in 1992. We will continue to monitor our funding
streams closely. As we have publicly stated, the Museum’s Trustees
reserve the right to reintroduce admissions charging should our grant-in-aid
from DCMS fall to such an extent that the care of our collections would
be put at risk by not doing so.
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