Is the British Museum losing its marbles?

Myopia at the Treasury is putting a great institution at risk, writes Andreas Whittam Smith

"The economics of the madhouse" - that is the phrase which keeps coming to mind as I contemplate the present plight of the British Museum. On the one hand, it has secured pounds 30m of Lottery monies, and expects more, for the Great Court scheme to open up the large central courtyard of the museum, unseen for 150 years, and so allow many improvements to be made. On the other hand, it is going bust quickly in terms of current expenditure and receipts and to avert disaster it must contemplate massive staff cuts and charging for admission.

Go to the British Museum on any day at any time of the year and you will find its rooms crowded with people, British and foreign, young and old. It attracts six million visitors a year, more than any other British institution. And yet all this is put at risk by the mad economies of HM Treasury.

The Treasury, through its out-station, the Department of National Heritage, has decided to reduce the state's annual contribution to running costs by 15 per cent in real terms during the next few years. It neither sees the museum as an important element in the educational facilities of the country, which it is, nor as a prime asset of the big industry that is British tourism. The Treasury in its myopia sees the museum as an inefficient, old, dependent institution where cuts can only do good.

There is worse insanity. When the Government decided some years ago to shift the British Library out of the British Museum building into new premises next to St Pancras station in London, a move which is now taking place, it failed to make any provision for the museum's loss of the considerable sums which the library has paid annually in rent and service charges. This takes the cut in the museum's grant in real terms up to 24 per cent. This would be as damaging as the incendiary bombs which wrecked a large number of rooms in 1941.

In a review of the museum's operations, which the trustees commissioned from a retired deputy secretary of the Treasury, Andrew Edwards, the author writes: "There is no disagreement that the extra burdens for the museum are a direct consequence of the decision to move the British Library. The Department has not so far, however, felt able to increase the level of forward grant to compensate."

Then, in an extraordinary passage, the former civil servant unwittingly reveals why the Treasury is by instinct unsympathetic to the museum's financial plight. He criticises the museum for being "cautious in its relationships with other constituencies including government". Its general preference is to "minimise dealings with external constituencies ... it has a tradition of self-sufficiency ... It prefers ... to stand firmly by its own beliefs and traditions". In other words, it does not easily bend the supple knee. The museum is 237 years old and sure of itself.

Mr Edwards makes three main recommendations: be more trendy (yes, Treasury officials have some notion of trendiness); charge admission and reduce staff numbers by up to one-third.

Certainly the museum is untrendy. People freely enter the museum, study the floor plan, visit such rooms as they choose, find in each a clear account of what is in front of them and read the excellent labels which accompany each object. That is it; nothing more is attempted.

Mr Edwards writes with evident disapproval of this approach. He says the magnificent collections are "deemed" to speak for themselves. The museum has not seen itself as needing to attract audiences in a competitive market and has not thought it necessary to take special steps to "stimulate public excitement or enthusiasm". Presentation is designed to be consistent, cautious and tasteful rather than "eye-catching". The image of excellence is all-important. "Vulgarity is to be avoided at all costs". The approval of scholars is the "dominating objective and its achievement is the highest accolade the museum can achieve". Less importance, clucks Mr Edwards, is attached to winning accolades from the less scholarly.

The museum must not go down the path indicated by Mr Edwards. He believes that the museum should sell itself much harder but wants it simultaneously to make the whole task 10 times more difficult by charging pounds 5 or pounds 6 for entrance. Is this not a further example of the economics of the madhouse? You first cut the number of visitors by half (judging from the experience of charging by similar cultural institutions) and then try to win them back by a series of trendy initiatives.

It is not that some reform is not needed. The trustees have also engaged in their own version of crazy economics. It is astonishing to find from Mr Edwards' report that the museum does not employ any qualified accountants. It receives approaching pounds 50m a year by way of government grant, sponsorship monies and its own earnings, yet does not have a financial director. It has no idea how it spends it money other than in the round. It would not know what the internal costs of the current China exhibition are, only what the external charges are.

It balances its budget by arbitrary cuts at the last moment in areas where no staff redundancies would arise - and thus recently reduced the sums set aside for acquisitions. Staff numbers have grown when the museum is in funds and scarcely fallen when its position is tight. It has almost certainly wasted money on a significant scale.

This is the fault of the trustees, not successive directors. Securing careful expenditure of public funds is one of the things they are there for. They are supposed to be sensible folk, living in the real world, businessmen among them, knowledgeable about practical things. How have they been able to make sense of a jumble of figures each month which mixes up current and capital items? As soon as the trustees apply modern methods of financial management they will see what their staffing should be and they will be able to save substantial sums, albeit not sufficient to balance the books if the Treasury cuts its grant by 24 per cent in real terms.

Rather than the "mission statement" proposed by Mr Edwards (another trendy thing) the trustees should reconsider the statement issued by their 18th- century predecessors, entitled "Fundamental principles from which the Trustees do not think they can in Honor or conscience depart". If it is true to those, to its history and to the wishes of its benefactors the museum must encourage and support scholarship.

Of course the trustees have a duty to manage the museum efficiently, but they also have the right to look primarily to the Government for support. Then it will remain true to the vision of those founding fathers that its fundamental purpose should be collection of a national treasure "for the use and benefit of the publick, who may have free access to view and peruse the same". Some principles are best untrendified.