Parts of heritage sector ‘on brink of collapse’

Some heritage organisations and historic UK sites are "one rainy day away from collapse" due to rising operational costs, staff shortages, declining visitor spending and piecemeal public funding, a new report has found.

The research, carried out by charity The Heritage Alliance, details how the heritage sector was in “a compromised financial position” pre-2020 as it contended with accelerating digitisation, shifts away from volunteering models, new regulatory requirements and a decade of public spending cuts.

Compounded by post-Covid challenges, the study found that parts of the sector are now “on the brink of collapse” with an estimated backlog of essential repairs and maintenance of at least £3bn for historic houses and churches alone. Additionally, it claims that caretakers of several nationally significant historic sites have privately reported that they have less than a month’s worth of expenditure in reserve.

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According to the report, which calls for a Select Committee inquiry to examine the financial status of the UK heritage sector, organisations have been forced to make “quick wins”, including cutbacks on conservation projects, collection care, and building insurance, which risk invoking higher costs in the long term.

Although the report says that compromising on insurance was “previously unthinkable”, it found that premiums for historic buildings have risen significantly since Covid due to increasing prices for construction and providers leaving the sector, while at the same time, threats of damage from extreme weather and heritage crime are growing.

“The concerning reality is that many previously ‘essential’ costs for heritage organisations are now susceptible to cutbacks,” said the report, which recommended listed buildings be exempted from Insurance Premium Tax to help relieve rising costs in the insurance market.

Staffing costs and decreased revenue

Issues around staffing were also found to be one of the major drivers of financial instability within the sector. The report found that entry-level workers who might have previously sacrificed salary or stability to pursue a career in heritage are no longer able or willing to do so, and volunteers can no longer afford to give up their time for free.

The issue is so acute that a survey conducted as part of the research revealed that more heritage organisations consider staffing a significant concern than energy bills, with employers struggling to match wages to rising inflation, resulting in a "brain drain" from the sector.

In addition to budget pressures, Heritage Alliance cautioned that organisations are contending with decreased revenue, reduced visitor numbers, and a need to adapt to evolving audiences.

The report found that since the pandemic, the public has less money to spend or donate to heritage sites and is more likely to avoid travel due to transport costs. Meanwhile, school trips are also falling in number due to financial pressures on the education sector.

According to English Heritage, the cost per head for educational visits is projected to hit £3.89 in 2024, a 73% increase from £2.25 in 2019/20. Figures from the National Foundation for Educational Research show that, as of September 2023, 39% of school leaders reported that they had made cuts to school trips and enrichment activities due to the cost of living, rising to 41% within special schools and 49% within primary schools.

In its recommendations, the report urges the government to subsidise youth entry to heritage sites and embed school trips to heritage sites within the national curriculum.

National sector support portfolio

Heritage organisations also reported challenges in generating external funding, including the collapse of local authority budgets and grants that have not kept pace with inflation.

“A decade of public spending austerity…has left many organisations in a precarious position, with limited capacity to absorb or adapt to the shock of the cost-of-living crisis," the report states.

“With no buffer to absorb funding cuts, these organisations are just one budget reduction away from having to close their doors.”

In its recommendations, Heritage Alliance calls for the establishment of a national sector support portfolio system simillar to Arts Council England to help simplify its complicated financial landscape comprising of public, private, and self-generated income streams and provide greater longer-term stability than project-based models.

The report claims that a combination of grant-in-aid and ring-fenced National Lottery funding could facilitate more equitable support for the entire heritage sector and provide security. It also urges government to establish a new Culture Growth Fund to provide targeted and sustained core investment.

At a local level the charity wants council cultural, heritage, and planning services budgets to be ringfenced, as well as investment in archaeology and conservation roles within local authorities.

It also suggests that adapting existing Community Ownership and Community Wealth Fund schemes for local heritage sites could help fill funding gaps left by local authorities.

“As this report so vividly shows, the costs of looking after heritage just keep on growing," said Ben Cowell, Director General of Historic Houses.

“Given that most heritage is looked after within the private sector, it is clear that the government should do much more to support the many independent owners and custodians of some of England’s most important heritage assets.”

Hilary McGrady, Director General of the National Trust, added: “There is a real risk that the structure of the sector could begin to crumble and that heritage assets – and the skills and workforce that care for them – will be lost.

"We want to see more attention paid to this urgent threat and action from the government to shore up this sector that enhances all of our lives.”