Supporting Brighton & Hove Museums
Councillors are being asked to approve the release of a £1 million interest free loan to support the running of Brighton & Hove Museums.
The loan is part of a package of financial support agreed when the Royal Pavilion & Museums Trust, which trades under Brighton & Hove Museums, was formed in 2020.
If approved, the cashflow loan will be the third drawdown from a £4million loan agreement put in place to help Brighton & Hove Museums recover from the devastating effects of the pandemic.
Brighton & Hove Museums was formed in October 2020, when councillors from the council’s Policy and Resources Committee agreed to transfer the Royal Pavilion and Museums services to an Independent Charitable Trust for the next 25 years.
The council remains freeholder of the sites which include the Royal Pavilion & Garden, Brighton Museum & Art Gallery, Hove Museum of Creativity, Booth Museum of Natural History and Preston Manor & Garden.
Brighton & Hove Museums are at the heart of the city’s history and heritage. The decision to move their management to a charitable trust was made by the council to ensure the museums service is sustainable, resilient and able to deliver the best possible offer to residents and visitors.
Since its formation, Brighton & Hove Museums has secured significant funding, through charitable funding which the council cannot apply for. Its charitable status continues to provide opportunities to increase income, such as Gift Aid on admissions, donations, and other fundraising opportunities, to protect the fabric of the buildings and heritage assets.
As a charity, Brighton & Hove Museums is also free from any negative impacts of annual local government budget setting. Around the country other local authority museums have struggled since the pandemic and not been able to draw on financial support through extremely tough budget setting processes.
The transfer took place during the Covid pandemic which saw attractions close, staff furloughed and visitor numbers plummet. In response to the challenging financial climate, a recovery package offer of financial support was agreed.
The recovery package recognised that Brighton & Hove Museums would be operating under exceptional and unprecedented challenging times and included a loan facility of up to £4 million to support cashflow in the early years of operation whilst the new organisation built up its reserves.
Requests for drawdowns on the interest free facility are subject to the council agreeing the business case, which includes a repayment schedule.
Under the agreement, drawdowns can be made up to September 2025 and all loans will be repaid by September 2030.
So far, Brighton & Hove Museums has drawn down two instalments totalling £2 million – the first in March 2021 and second in March 2022. These were to aid cashflow challenges due to limited trading during the pandemic.
The request currently being considered is supported by a 5-year projection of income and expenditure, cashflow and a repayment schedule, with a financial model which outlines how B&HM expects to break even this year as visitor numbers move back towards pre-pandemic levels.
The report also acknowledges that, from April 2024, the council is reducing the service fee it provides under the service level agreement with the organisation.
Cabinet members will make their decision at a meeting on 27 June.
CEO of Brighton & Hove Museums Hedley Swain said: “The Royal Pavilion & Museums Trust was created during an exceptionally difficult time. As a new organisation, we were starting out with minimal reserves and the loan was always part of our plan with Brighton & Hove City Council. This was to help cash-flow as we moved from an organisation run by the local authority to becoming an independent charity.
“Since the charity was formed, the organisation has made exceptional progress, accessing significant external grants, funding and revenue and we are delivering incredible value to the city.
“Our venues offer a wide and accessible range of art and culture for everyone. Currently we are hosting the fantastic exhibition ABBA: One Week in Brighton, a Rembrandt masterpiece on loan from the National Gallery, our Henri Matisse exhibition at Hove Museum of Creativity and we have just launched a fascinating immersive experience exploring the history of tea called Shadows of Empire at Preston Manor.
“We have a programme of free and low-cost activities for families through the summer, plus a vibrant community engagement programme working with people across the city.”
