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Chamber and committees

Constitution, Europe, External Affairs and Culture Committee

Meeting date: Thursday, September 29, 2022

Agenda: BBC Annual Report and Accounts, Pre-budget Scrutiny


Contents


Pre-budget Scrutiny

The Convener

Our second item is to continue taking evidence as part of our pre-budget scrutiny of the culture spending portfolio. I welcome Sir John Leighton, director general of the National Galleries of Scotland; Lucy Casot, chief executive officer, Museums Galleries Scotland; and Alex Paterson, chief executive, Historic Environment Scotland. A very warm welcome to you.

I will start with questions about the financial outlook for your sectors. Last week, we heard that cultural organisations are experiencing a “perfect storm” of rapidly, and in some cases unexpectedly, increasing costs and reducing income. Your submissions would reflect that to us today. I will ask each of you in turn to provide an overview of the impact of the pandemic, the costs crisis and other financial pressures on your budgets and the impact that that will have be on the levels of service that you can provide.

Sir John Leighton (National Galleries of Scotland)

Thank you very much for inviting me to join you this morning. I know that you do not want any grandstanding or opening statements, but perhaps I could begin with something positive, because if you are speaking about funding all morning, it is going to be completely miserable, isn’t it? All of us represent sectors and organisations about which there is a huge amount to be optimistic, as we are all about enhancing people’s lives, so I hope that you will indulge me just for a moment.

Stepping back, I think that there is a huge amount that we can be positive about, certainly at the National Galleries and in the wider museums and galleries sector. Levels of interest in what we do have steadily increased over the years, certainly at the National Galleries. In the past decade, visitor numbers at our Edinburgh sites have more or less doubled. Pre-Covid, we were welcoming on average 2.5 million visitors to our Edinburgh sites.

We have also managed to keep national programmes running. We have lent works of art across the country in exhibitions from Dumfries to Shetland. We have run national programmes in learning outreach, and we have worked with disadvantaged teenagers in the west and in the Borders. We run all manner of programmes for all ages at our Edinburgh sites, from BOYB—bring your own baby—through to the fantastic gallery socials for dementia sufferers. We also work internationally, lending hundreds of works of art across the world, as well as exhibitions. Every one of them is a mini ambassador for Scottish culture.

Finally, our activity online has blossomed and our offer online now reaches millions of people across the world. We saw during the pandemic how important that has been and has the potential to be. We have lots to be positive about and we all know that we look after assets that are of immense importance for the life of people in this country.

That is the positive bit. When we turn to funding, of course, it is inevitably less positive. I am sure that what you will hear this morning is fairly familiar from right across the culture and heritage sectors. In our case, we face a funding challenge the like of which I have never before witnessed or, indeed, imagined. Already, before the events of recent months, we were looking at a pretty substantial deficit in our budget for next year, widening in the years beyond that.

When you layer in the lingering impact of the pandemic and when you layer in the dramatic inflationary costs that we are seeing at the moment—the pressure to try to keep paying a fair wage to our staff and, particularly in our sector, the rising energy costs, which for my organisation are predicted to at least double next year from a six-figure sum to a seven-figure sum—you are talking about a crisis that, to me, feels more serious and more difficult to deal with than the pandemic itself.

It would be tempting to relate all this to the immediate context of the pandemic, war, inflation or the cost of living, but to my mind the roots of this go further back and lie in patterns of funding across a longer period. It is fashionable at the moment to refer back to the financial crash of 2008, but if you go back to that time, you will see that budgets for organisations such as mine were reduced in the aftermath. They never recovered and what happened in the period from, say, 2011 onwards is a pattern of more or less level funding across the piece, if we take out increases that were designed to cover Government pay policy and if we take out the more variable nature of capital funding.

Like other organisations, we have tried to make up the difference by pedalling ever harder with self-generated income, and we work very hard at that. We have set up a very successful trading company with revenue from shops and cafes. We have explored venue hire. We have lent commercial exhibitions abroad. Car parking charges, donations—you name it; we have pulled every lever we can think of, and with some success. The model broadly was of Government subsidy supplemented by self-generated income. That Government subsidy has been covering less and less of the activity that activates what we do and what the public see. We have reached a point now where 92 per cent of our grant in aid goes to the salary bill. All the other things that make a difference, whether it is displays, exhibitions, learning, education programmes—you name it—are now covered by earned income.

The model broke during the pandemic, of course. That income shrivelled and we are now in a period where it has not yet recovered. With the two key parts of the funding—the Government subsidy and the self-generated income—under pressure, we face a crisis that will, in our case, lead to a severely reduced offer, with national and international programmes reduced, different patterns of opening hours and partial closure of sites. In short, as we said in the submission, we will have an offer that falls severely short of what you would expect from a national cultural organisation.

That sounds bleak, but it would be no exaggeration to say that, as I look to next year and beyond, I am thinking that this is about how we protect the collection, keep the lights on and doors open—and that is it.

10:15  

Lucy Casot (Museums Galleries Scotland)

It was great to hear John Leighton start with the positives, because we have a fantastic museums and galleries sector in Scotland. I want to talk first about the sector before talking about Museums Galleries Scotland as the national development body. I am here very much to represent the sector. There are 442 museums and galleries in Scotland on our books and they are spread right across the country in all sorts of communities.

It is a very diverse sector, which makes it quite a complex sector, but there is richness in that as well in terms of its creativity. As well as our fantastic national institutions, the quality of which we are very lucky to have in Scotland, about a third of our museums and galleries are civic—either run directly by local authorities or by arm’s-length trusts—and about 60 per cent more are run as independent charities.

The charities in the independent sector face a different range of issues. Quite a number of them are run wholly by volunteers or maybe with one member of staff. The issues that they face and their ability to respond to them are varied as well. You heard last week from Kirsty Cumming from Community Leisure UK about a lot of the pressures that are facing the civic museum sector. It is a huge concern that, as Sir John said, the issues that are facing the civic museum sector as a non-statutory service were severe before the impact of Covid. The funding that was made available to museums and galleries during Covid was not made available to the civic sector, so it came into this year with real issues. I am very concerned about the ability to protect that non-statutory service given all the pressures that are facing local authorities.

I particularly want to talk about where we were very generously supported by the Scottish Government through the pandemic, such that we did not lose any museums and galleries as a result of Covid, which was quite remarkable, because it is not what we expected to happen when the pandemic started.

The last round of funding that we gave, which we hoped was going to be for the recovery of the sector, was based on ensuring that these fragile organisations would have three months of reserves come March 2023. That was the calculation that was made based on the estimates of income and expenditure for this year.

We saw a recovery begin this summer, but it has now stalled. Those visitors who are coming are spending about half what they did in the past; in particular, we are not seeing the international visitors returning or spending to the same level. The levels of income that have been generated this year are not what was hoped for. Now, we have the cost of living crisis and the energy situation, which mean that the organisations that were fragile going into this year are in crisis now. Since the submission was made, we have put out another call for up-to-date information and I can share with you some of the things that came back from that.

This is the biggest threat that people have seen to their organisations for more than 30 years. There are organisations that have discontinued their buildings and contents insurance, because they simply cannot afford it. There are organisations that are cancelling all but emergency maintenance. Those things are not a sustainable position. When it comes to insurance, the next step for an organisation would be to discontinue public liability insurance, at which point it would close. Many organisations are reducing their opening hours because that is the choice that they have to make in order to reduce costs, just at the time when communities are calling on them to be those warm free-to-access spaces that would be so valuable.

I am very concerned about the position in our independent museum sector with what is facing people at the moment. The organisations have an obligation to care for their collections, so if they go into crisis and fail, finding a new home for those collections, which they hold on behalf of their communities and on behalf of the Scottish public, is something that will have to be faced up to. In many cases, their governing documents would suggest that those collections should go to either the local authorities or our national organisations. It would not be easy for those organisations, which are already struggling, to be in a position to accept them.

I am sorry that that is bleak, but it is the reality.

Museums Galleries Scotland, which is the national development body that supports the sector, distributes funding, but we support the sector in many other ways as well and we grew during Covid to be able to support the sector. Our activities, particularly with grant making, got larger. The cuts that we are looking at now are not the 2 to 5 per cent that is being billed but more like a 30 per cent cut in our budgets for next year. Our ability to support a sector that perhaps has never needed us more is definitely a major challenge.

We have increased our work to support the sector in its journey to net zero and we have increased our work to support fair work practice in the sector, but those things, which are so important, were additional to our core grant activity and are now at risk.

We are a very agile organisation and have worked hard to reduce our costs. One of the things that we did in the past year was to move our offices. We have made a 67 per cent cut in our running costs on that basis. We have very little left by way of efficiencies to make.

That is a summary of the situation as I see it.

Alex Paterson (Historic Environment Scotland)

I repeat what my two colleagues to my left have said.

To come back to the three points that you asked about, you asked about the impact of Covid. We might think that Covid is away now, but it is not. It is still here and its impacts are still being felt. We did some research in the historic environment sector at various points over the past two or three years and have been able to track its impact. Fairly obviously, when 80 per cent of the tourism market packs up and goes home, there is a very direct impact on the sector.

In our organisation, £53 million disappeared from our budget when global tourism stopped. We projected that it would take at least until 2025 to get back to where we were pre-Covid. Recovery has probably happened a bit faster than we had anticipated and visitor numbers at our sites across Scotland are ahead of where we expected them to be. On average across our sites, we are probably now back to close to 60 per cent of pre-Covid figures, which is good to see, and a lot of that has been driven by the return of international visitors over the past six months. That was a big hit on us and the ripple effect was felt through the sector as well.

Just when we thought that we could see some green shoots of recovery starting to appear, albeit that we were not in any way back to where we were in 2019, the cost of living crisis came through. I chaired a meeting with my opposite numbers from across Europe back in May at which we were asking, “What does looking after culture and heritage post-pandemic look like?” One of my colleagues said, “Covid is not the issue now; it is the cost of living.” For a sector that is very fragile after surviving the past couple of years, this is a double whammy, which is very concerning. The support for the sector that was there through Covid is not there at the moment.

The cost of living impacts in a number of ways. The most obvious thing is costs. I can see it, our different organisations all see it and the sector sees it. There are material cost increases, and major projects are difficult to take forward because we just cannot pin down costs, and contractors will not commit to future costs or prices with any degree of precision.

We are looking at the moment at potentially a quadrupling of our energy bill. Although other things might intervene to limit that, it would mean going from about £1 million to about £4 million in energy costs. Whenever we arrive at an outcome with the wage negotiation, that is an extra cost.

Fixed costs are increasing even if we do nothing, but it is not just the fixed costs; there are other costs there as well. We run a grants programme and a lot of our grant recipients are now coming back to say that all these issues are hitting them. Their projects are being delayed and potentially cancelled, but the costs are increasing.

The cost side of things is a concern, but the income side of things is a concern as well. We did some research a couple of weeks ago that showed that 65 to 70 per cent of people in the UK are already cutting back on disposable income spend. Going to a museum or a historic attraction falls into that category. We are aware that disposable income might not be as much as it was before and that people will have to make choices. The upside is that the exchange rate at the moment perhaps makes tourism for international visitors a bit cheaper, but that is a very slim silver lining given all the challenges that we have.

What does all that mean going forward? It means that the Scottish Government’s budget will be under even more pressure to address the wage settlements and the other costs. That will feed through to grant in aid funding for us and other organisations. We had the resource spending review and the capital spending review a number of months ago, which was helpful in giving us indicative budgets going forward, but they are indicative and the world has changed a lot in the intervening months. Although I can look at what is happening in the visitor market and see signs of recovery, which is positive from our point of view in terms of income, there are challenges in how much grant in aid will be available to support what we do.

A final comment is that about 36 to 38 per cent of our budget pre-Covid was funded by grant in aid and the rest was funded by commercial income. That is quite a challenge and quite an exposure, frankly. It will take a while to get back to that level, but with expectations on the Scottish Government budget being limited, even maintaining that level of support will be quite challenging.

We are in the same boat as my two colleagues to my left here, with costs increasing and income improving but with a high degree of uncertainty. What gives in all of that I guess is the question that we are asking ourselves at the moment.

Thank you. We will move to questions from the committee.

Jenni Minto

That was very sobering—I think that we used that word when we took evidence last week, as well. I will throw back to you the question that you just asked. Given this crisis, how are each of your organisations looking at the way that you operate?

Lucy Casot, you talked about small museums that had perhaps been planning capital work that would reduce costs but have found that the costs are increasing because of the cost of living situation. I was also reflecting on your point about warm spaces, which I think impacts all of our witnesses. Across my constituency of Argyll and Bute that is what local organisations have been looking at. If those spaces are impacted, where are people going to go? I suppose that that also touches on the wellbeing of people in Scotland.

There are a few topics there to explore. You have all touched on them, but I would like you to expand on them.

Lucy Casot

The question of what gives is a difficult one. Of course, we are talking about a lot of different organisations, so there will be different choices, but they are all difficult choices and my fear is that what gives first is all the activity that animates the collections. We have talked a lot about the potential for museum collections and activities to help with health and wellbeing, and it is often that programming that delivers equality, too, because there is programming around different ways of accessing collections for young people, families, and children with autism, for example. Those are the programmes that are the easiest things to lose, but there is a great cost to that—there is an opportunity cost and a loss of all the ground that has been gained in terms of experience, sharing of practice and so on. I worry about that because those who perhaps need those collections the most have to have something in place that opens the collections up to them. If that is not in place, you will end up with an audience that is much more made up of the people who are already confident about accessing those services. I think that that is a big risk.

Our organisation is looking hard at what is the most important thing that we do. Is it the services that we provide? What can we pause? We are looking at things such as our recognition programme, for example, to see whether there are some activities that we could put on pause in order to focus on the most urgent needs. You may have seen that we paused our grant-making programme for now, so we have £750,000 left and 440 museums in difficulty. We want to be very careful about how we spend that.

During Covid, one of the important things that we did was open up our funding to non-accredited museums. Some museums meet those professional standards, and a really important part of the work of the sector is encouraging those standards. However, there are also a large number of important community-level museums and volunteer museums—one that provide a fantastic service and asset in communities, often by telling the stories of those places and being part of the unique identity of those places—that cannot access our funding at present because we have returned to our pre-Covid funding programmes. That is a huge challenge in relation to the question of what we value. It is difficult to say. Do we value the most important collections or do we value what those museums bring to their communities? We are thinking hard about those issues and are talking to our colleagues in Scottish Government. However, £750,000 is not going to solve the problem, so we will need to make those difficult choices. We have not quite resolved that yet.

10:30  

Jenni Minto

Sir John, in your introduction you talked about people making decisions about how they were going to spend their money. On Monday, we had a round-table session with various community groups and the stark point was made that people will look at £20 and try to think about how they are going to spend it. I ask you the same question that I put to Lucy Casot. What are you looking at with regard to the way in which you operate?

Sir John Leighton

As Lucy Casot has said, the first thing that gives is programming and the activation of the collection. The difficulty with that, of course, is that not only do you cut back on the offer but that then has an immediate impact on your ability to generate income, so you get into a vicious downward spiral.

If we do not do exhibitions, for example, then we do not benefit from the exhibition tax credit, which has been so helpful. If we do not have people coming through the doors and we do not get donations, we do not get gift aid and so on. Membership, which has been an important form of income for us, is highly dependent on the form of programming. If there is no offer that people want to pay for or see, why should they become a member? That side of your activity very quickly comes under pressure.

Certainly, we are modelling different forms of opening hours—for instance, closing a couple of days a week at certain sites, perhaps having a partial closure of a site or closing one site for extended periods. Can we earn more income? Yes, we can always push that hard, but we have been pulling those levers quite hard for the past decade. Can we cut more costs? Yes, every organisation can cut costs, and we have been doing that: we have been running shared services with the National Library of Scotland and with National Museums Scotland and, this year, we ran our second voluntary exit scheme this year—in two years, we have said goodbye to more than 40 staff. The creativity in that regard begins to run out after a while.

Alex Paterson

I think that, during Covid, we were all forced to revisit what our priorities were, and we were very fortunate to be assisted by the Scottish Government increasing our grant in aid when 85 per cent of our commercial income disappeared like snow off a dyke.

We have been pulling back on some of the things that we do and, to be honest, I think that that is just business as usual now. With regard to how we might deal with the challenges that we see coming down the track towards us in relation to the cost of living implications, the first thing is to focus on the core business, which means that things that are nice to do but not essential to do will not be prioritised.

As Sir John said, the core business is critical. If we cannot open some of the castles, that affects the income that flows in, due to the impact on the membership offer and so on. Looking after the core business is really important.

We have to find ways of continuing to invest because a lot of the things that we look after are, by definition, historic assets and they were there long before us and will see all of us out. However, they need investment. A short-term pulling back in that investment has long-term implications, not only in terms of capital costs but in terms of things such as skills. The sector faces a huge crisis just now in relation to traditional skills such as stonemasonry. Whatever the short-term budgetary challenges are, we need to find creative ways of continuing to invest. If we take a short-term view, we will end up with long-term challenges.

I think that what a lot of this is leading us all towards is asking some pretty tough questions about what the strategy will be for some of the sectors that we look after or are involved in. Are the strategies that were right or possible in the past still possible going forward? Some of those bigger strategic discussions are quite important.

I would just offer two other quick thoughts. I know that my organisation is perhaps in a slightly different position than some organisations in the sense that we have commercial opportunities, but the parameters within which we are asked to operate through our framework agreement with Government do not allow us to pull some of those levers particularly easily.

Although we have a real challenge, I think that there are some opportunities that we would like to look at. How can we encourage more incentivisation to do certain things without it necessarily having an immediate negative impact?

Another point that I would make—I would say this whether there were a cost of living crisis or not—is that we need to change the narrative around what we as a sector collectively do. We are called Historic Environment Scotland, so people think that we work in the past, with the past. Yes, we do, but what we do is as relevant to today and tomorrow as it was all those years ago.

We have to see culture and heritage and historic environment not as nice-to-haves but as being actually quite fundamental. That is why, in our submission, we did not say too much about us. Instead, we talked about the contribution that our sector makes to the economy through income, tourism, jobs and the procurement trickle-down to lots of small businesses, and to the wellbeing agenda. In other words, what we all collectively do is not in a nice wee box, packaged off to leftfield; it is fundamental to many of the Government priorities, but it does not get seen in that narrative context.

The final point that I would make is on the ambition around net zero and climate change. If we could address the problems of historic properties—not castles and standing stones, but the 20 per cent of the buildings that people live in, go to school in, work in and are in hospital in that are pre-1919 buildings, which is the definition of a historic property—by retrofitting them, reusing them and making them energy efficient, a lot of the challenges we have around net zero would be met.

That is why what we do and why investment in the historic environment—not just in my organisation but in the sector—is important. It contributes to the agendas of today: climate, net zero, wellbeing, inclusion, education, economic development and community wealth building. We need to change the narrative from saying, “We get the crumbs that are left at the end of the table,” to, “This is core to what we are trying to do to build a better Scotland”.

A few of us attended the international culture summit in the Parliament during the summer, and that was the key message that came out of that from across the world, so thank you for that.

Mark Ruskell

Alex Paterson, I would like to ask about the particular issues around managing the historic assets that are under your care, particularly with regard to the masonry issues at the moment. We have had a submission from the Institute of Conservation, which said:

“There has been a lack of investment ... for many decades”.

That means that this is not a Covid issue or a cost of living issue but one that has been evolving over time. The submission also said:

“the burden of maintenance and repair is increasing.”

Do you recognise that the issue is having quite an impact on certain communities now? I use the example of Dunblane, where the graves at Dunblane cathedral have been fenced off for the best part of two years, and it is starting to make the historic quarter of the town look quite dilapidated. There is a lot of frustration about the impact on the surrounding community. It is a difficult issue, but do you recognise that? Do you see a way out of that situation? Some of our historic assets now are effectively being frozen and it is having an impact on many communities.

Alex Paterson

I absolutely see that. One of the things that I have done a lot in the past few weeks and months is go around many of the communities that have in their midst one of our properties that is either closed or restricted. We acknowledge the impact that the issue is having.

The flip side, I would say, is that we almost had no option but to do what we have done. We have 60-odd sites at the moment where access is restricted—I use the words “access is restricted” rather than “closed” because they are not all closed, and, actually, there are quite a number of sites where access is restricted and the visitor numbers are still good because there is still a good offer. As I said, we almost had no option but to do what we have done, for the simple reason of risk to life. We embarked on a project to look at the life safety risk at all our sites, which comes in various forms—it involves gravestones, trees, boats and a range of other things—and we wanted to be assured that we had everything in place to mitigate those risks. The last thing that we want is for anyone to suffer an injury or worse at any of our sites.

One of the components of that—we call it the tier 1 programme—was high-level masonry. The way in which high-level masonry had been inspected in the past—we are talking about buildings typically without roofs and with high walls and so on—involved either an inspection from the ground or inspection by drone. However, neither method gave us the level of assurance that we needed. so, we carried out pilot work at four sites and we found out that, yes, we had an issue that we had to face. That issue is down to many things. It is down to a lack of investment over decades and, as my technical colleagues would say, the exposure of some of the sites to climate change—that is not the full cause but it has accelerated some of the decay that we have.

I spoke to lawyers ad nauseam about the issue and their advice was, “If you think there may be a risk, you have to assume there is a risk and you have to act on that”. One of the toughest decisions that I have had to take in this job has been to put restrictions in place at a number of sites until we can be assured that the sites are safe.

I would say that more than 80 per cent of our sites are still open and are still accessible—the narrative often is, “All your sites are closed,” but that is not true. We have embarked on and are well through a programme of inspections to see what the challenge is and what we need to do to get those sites back open.

We have been able to reopen a number of sites, but the inspection programme will run through the winter or run into next year. Until we have done the inspections and know what we are facing, it is difficult to know what the solutions are. On some of the sites that we have inspected, we have been able to fix small problems as we have gone along. St Andrews castle is a good example of that approach, and the site is now reopened.

We recognise the impact that the issue is having on communities, and that is why I have gone out to speak to a lot of communities about how we can work together to address the challenges that our closures or restrictions are bringing. Three things have struck me in those conversations. First, the communities do not like their sites being restricted any more than I do. I have been up front and honest and have explained why we have done what we have done and what we are doing to try to address it, and that has been appreciated.

Secondly, we have explored with them how we can work together, and that has been a very productive and fruitful conversation. There are things that we can do with local communities, short of our sites being fully open, to enhance the offer and provide opportunities in those communities.

Thirdly, we have ensured that we are not just restricting access and saying, “That is it”. Instead, we have put a fair amount of interpretation into sites, done new things and rolled out a range of digital interventions to try to provide a visitor offer even where the full access to the site is not possible.

I fully accept that this is not where we want to be and that it will take a bit of time to get the whole thing resolved. This is little consolation, but the situation is not unique to us; other heritage asset owners across Scotland and across the world are facing similar problems. It does not feel comfortable sometimes being out in the vanguard of all this, but it is the right thing to do. I could not sit in front of this committee and say that we have decided to leave a site open and somebody has been hit by a small rock falling from a huge height and somebody has been badly injured or worse. I cannot take that risk.

Mark Ruskell

There have been examples where communication with the community has not been ideal. In the example that I gave from Dunblane, there are surrounding museums that are affected by the issue. Maybe you could take that away and consider the consistency of the approach. Everybody understands that there are budget constraints and that we are in a difficult time, but it is important to work with communities so that people understand when something will be fixed and how.

Alex Paterson

I know that we have had correspondence recently on Dunblane. I will take that away and write back to you. I am also happy to meet with the community of Dunblane.

Mark Ruskell

Great—thank you.

I move to Sir John Leighton and Lucy Casot on another issue. I am aware that there has been a programme on Scotland’s colonial history and legacy, which has been a detailed piece of work for museums and galleries. One of the recommendations from that is the principle of culturally important objects being potentially repatriated, and there being restitution. Is that work progressing with your institutions and, if so, how? Repatriation could be an opportunity to strengthen cultural links with former colonial countries and communities in the way, for example, that was achieved with the repatriation of the ghost dance shirt nearly 20 years ago, or it could be seen as losing attractive assets from collections. I am interested to know how that work is progressing.

10:45  

Lucy Casot

Museums Galleries Scotland was asked to lead the empire, slavery and Scotland’s museums project on behalf of the Scottish Government after a vote in Parliament committing to having a slavery museum for Scotland. The aim was to consider how best to realise that.

The recommendations are not MGS’s recommendations. An independent steering group, which was chaired by Sir Geoff Palmer, spent 18 months looking at the issue and coming up with the recommendations. Behind that, there was a huge amount of research, with nine different strands, involving the museum community and public attitudes. There was particularly important research with the communities who are most at risk of exclusion and those who experience racialisation and the legacies of slavery and empire. The recommendations are therefore well founded.

The sixth recommendation is on the collections and the issue of potential repatriation. There was a recommendation about the Scottish Government taking a position on that, which we welcome, but we have not yet had a response from the Scottish Government to the recommendations.

In the meantime, there have been a number of cases of progress being made by individual institutions. You may have seen that the University of Aberdeen repatriated a Benin bronze to the kingdom of Benin. The Glasgow museums have repatriated three different collections to different communities, and other cases are actively in progress.

We are starting to see more progress in the area. You are absolutely right that there are opportunities to create connections, to make that part of our cultural diplomacy, and to share skills. It is not always about returning objects. A range of things can happen, such as sharing expertise, sharing access and so on. The issues are complicated, but there is a recognised process to go through in identifying the right owners of the objects.

We are aware that there are a number of objects in our collections that have been unethically acquired. I say “our” collections, but MGS does not have any collections. For us, it is a matter of supporting museums and galleries to find the right advice and process, and the sharing of the good practice that is evolving in Scotland.

There is good practice, and there are live cases involving the universities and national museums—certainly, the Glasgow museums are doing that, and the Royal College of Surgeons in Edinburgh has returned items as well. We are starting to see progress, which is welcome.

Sir John Leighton

We support the excellent work that Museums Galleries Scotland has done, and the report of the steering group makes excellent reading. The nature of our collections is such that—touch wood—I am not expecting any claims for restitution, not unless people start to want impressionist paintings to be returned to northern France, but I think that we should be all right in that regard.

However, an important issue for us is that of how we present and interpret collections that may have connections with empire or our colonial history. I suppose catalysed by the Black Lives Matter movement, we have all become aware that we need to be much more active in tackling issues of equality, diversity and inclusion across our collection, who we represent in the collection, and how art across time is presented.

A couple of years ago, we embarked on a complete programme of reinterpretation of the collection, starting with identifying objects where we had perhaps been very neutral in presenting them and looking again at trying to produce a more layered interpretation. There are balances to strike. For example, if you are presenting a portrait of David Hume, you can of course draw attention to his views on race, which are certainly now, and always were, unacceptable. However, you also have to point out that he was a great philosopher and had a huge influence on the pattern of western thought.

Striking the balance is sometimes difficult, and the path to virtue in these issues has become quite narrow. I think that we are fortunate in this country that the issue is perhaps less politically loaded than it has been for our colleagues down south. We are taking those actions with the support of Government and with broad support from communities and, I am sure, people round this table. As I say, getting those balances right is tricky.

There is great work going on and, as Lucy Casot pointed out, there are active cases. That is happening across the world. I am a trustee of the Rijksmuseum in Amsterdam, which is part of a consortium that is dealing with similar issues about the colonial past in Indonesia. The issue is not restricted to this country; it is Europe wide.

Mark Ruskell

My final question is on a very different topic. Last week, we had evidence from cultural organisations that pointed to where they may find additional sources of income. A number of the organisations pointed to the potential to use a transient visitor levy to raise money directly for culture. Have you had discussions with local authorities and others about that?

Sir John Leighton

When there was consultation on that through the City of Edinburgh Council, we got involved in that dialogue. We are broadly supportive, with the caveat that the moneys should flow back into cultural provision and not into dealing with potholes. However, we are supportive of the measure. It has been shown to work in other European centres, so why not here?

Alex Paterson

We submitted evidence to that same consultation. There is a balance to be struck, and it is a fine one, between increasing investment and making sure that our tourism and hospitality sectors remain competitive.

We offered some thoughts, which were more about the design of a scheme. We should make sure that any income that is raised is reinvested in the sector and is not put into a pot, and there needs to be transparency as to how that would be done. The tourism and culture sectors need investment—that is not in doubt—but we have to make sure that we do it in a way that does not disadvantage or make our tourism industry uncompetitive or perceived to be uncompetitive. Our view was more about the design—the principles of the scheme would be important.

Lucy Casot

We support the idea on the same basis. It is about where that funding goes. If it is used as a source of income generation, that would be welcome. We have to recognise the value that our sector brings as a draw for visitors in the first place. Our cultural assets are an enormous draw for visitors to Scotland. It could be a virtuous circle if it was done right.

Maurice Golden

I will start with a specific question for Alex Paterson, which follows up on Mark Ruskell’s initial question. At Arbroath abbey, there has been no access to the abbey itself for years now, as it awaits high-level masonry inspections. Clearly, that will have an impact on tourism in the Arbroath area. What are the timescales for the next stage beyond inspection and thereafter when might the abbey be able to open up fully? If you do not have the details, I am happy to receive a written submission regarding that.

Alex Paterson

Thank you for giving me the get-out-of-jail-free card. Arbroath is on the inspection list, but I will write to you formally with the timescale. We have tried to do what we can at Arbroath. We have opened a new visitor centre there and there is the scriptorium, which has opened recently. To go back to the point that I made earlier, where we can offer some experience, we are trying to do that. However, you are right that we need to complete the full inspection at Arbroath. I will write to you to give some more information about the timescale for that.

Maurice Golden

Thank you—that would be useful.

This morning, we have heard from Sir John Leighton about energy costs doubling, from Lucy Casot about the 30 per cent cut in budget, and from Alex Paterson that visitor numbers are just 60 per cent of pre-Covid levels.

As well as that context, there is the requirement to meet net zero, which has costs. There is a fantastic example at Holyrood lodge, which I visited earlier this year. Historic Environment Scotland has done some great work, but it is quite niche, and it is difficult to get contractors. Have you at least assessed the costs of achieving net zero through the building infrastructure? Thereafter, how on earth will we ensure that net zero is achieved?

To give Alex Paterson a break, I will start with Lucy Casot.

Lucy Casot

The simple answer is no—we do not have an assessment of the cost of doing that. To be honest, there is no sight of where the funding would come from, so we have not prioritised that exercise.

It is important to recognise that the issues that we are having with access to sites such as Dunblane, Arbroath and the other sites that Alex Paterson has been talking about is the historical lack of investment. If we are not able to invest in our properties, we will see such problems and closures.

Certainly, as an interesting contrast, an assessment was done south of the border in relation to museum estates and the need to adapt them, and there is now a museum estates development fund in England of £200 million a year. Our capital investment fund is £200,000 a year across more than 400 museums, so we simply cannot address the challenges. I do not see where the budget will come out of culture, and I do not see where it is coming from elsewhere either.

It makes perfect sense to invest in buildings and to adapt them. The net zero transition is absolutely essential, but I do not see where the answer is at the moment. We would be happy to try to do an assessment of the cost of that, but I do not see where the funding is coming from at the moment.

Sir John Leighton

Some years back, we were one of the first national museums in the UK to employ an environmental sustainability officer, so we have costed the required investment for our various grade A 19th-century listed buildings to put them into shape towards the path to net zero. That would be substantial and would be over a number of years, but as yet funding for that is not identified.

In our environmental response plan, there are three headings. There is what we can do as an organisation to become more environmentally efficient on our path to net zero. There is what we feel needs to be done—this will resonate with Mr Paterson—to deal with the anticipated increasingly dramatic impact of climate change and what we need to do to protect the collections.

The third and very important strand is how we can play our part in raising awareness of the issues. For example, that can be through the artists and the programming that we have. We work extensively with contemporary artists who I tend to regard in some respects as the canaries down the coalmine of society. They are often the people who respond earliest and first in very creative and imaginative ways to issues that are deeply relevant. Many of our artists are very involved in climate issues, so working with them and giving them a platform is an important part of what we do.

The impact of climate change is already being felt. Just two weeks ago, we had quite a dramatic flood in the Scottish National Gallery of Modern Art as a result of the downpours. That is happening increasingly, so the collections are increasingly at risk. Short of fire, there is nothing worse for precious collections than water. That is an increasing risk, and that will resonate right across the sector and will, I am sure, be multiplied hundreds of times in the historic environment.

11:00  

Alex Paterson

As an organisation, whenever we look at improving the condition of our sites, we look at energy efficient ways of doing that and net zero options. The most recent one, which you might have seen, was the introduction of solar panels on the roof of the national war museum at Edinburgh castle. That is a small contribution, but it is in the right direction. As an organisation, we are investing in net zero and climate change activities. We have a fairly extensive climate action plan, which is steering our direction in that.

On the wider point about whether we know how much it would cost to make the historic environment sector net zero, I suspect that my climate change team has a figure or can give some estimates so, in my lengthy letter to you, I might give an indication of that.

We have been trying to work out what needs to be done, partly in relation to cost and partly in relation to another thing that I will mention again, which is skills. It is one thing having the aspiration to make the buildings energy efficient and wind and watertight and so on, but we do not have the skills out there. Most construction companies do not have skills in their companies to work on traditional buildings.

In the past couple of weeks, we have just had our biggest intake of stonemasonry apprentices for a number of years. That is partly because some of the colleges are pulling back on provision but it is also because it is not just about fixing castles, standing stones and all these things—it is about the houses that folk live in. All the aspirations to be energy efficient and net zero go out the window—excuse the pun—if buildings are not repaired and maintained to the correct standard. That investment in skills is really important.

I go back to the policy drivers on net zero and the climate. I used to work in economic development, and I can understand entirely why wind turbines, offshore wind farms and wave and tidal power are important but, until we address the issues of reuse and the need to retrofit energy efficiency measures in traditional buildings, we will not make the progress towards net zero that we as a country aspire to. From a policy point of view, it is really important to incentivise and encourage investment in that activity.

My final line, which I always mention, although it is not within the Scottish Parliament’s gift to do anything about it, is to ask why there is 20 per cent VAT on repairs and maintenance to listed buildings when new build is VAT free. That is 20 per cent that could be taken off the cost if that incentive could be addressed.

That is a long answer to your question. I will come back with some parameters on the costs for the historic environment.

Maurice Golden

I have a final quick question. Today, The Courier has reported that benches outside the McManus art gallery and museum in Dundee’s Albert Square have again been destroyed by vandals tearing strips of wood off the structures. Are there any instances of criminal activity or vandalism that you have had to cope with? I am expecting the answer to be that the level of such activities in your buildings is low or non-existent.

Sir John Leighton (National Galleries of Scotland)

Sadly, yes, that does happen. Recently, a sculpture in the grounds of the Scottish national gallery of modern art was damaged by graffiti. The surface is delicate and it is probably impossible to remove the traces of that graffiti. Happily, such instances are rare. You are dependent on self-policing, particularly when you put sculpture into the public domain. I do not mind people putting pink bras on the Antony Gormley sculptures in the Water of Leith—that is fine—but physical damage is another thing.

Alex Paterson

Heritage crime, which would encompass that, has been increasing year on year for quite a few years now. That ranges from the deliberate to the completely innocuous and unintended. We have vandalism, occasional fire raising and antisocial behaviour at our sites. Unfortunately, that is par for the course. That does not happen everywhere, but it is more prevalent at some sites than it is at others, and our teams on the ground deal with it

Heritage crime is increasing. We have a good working relationship with Police Scotland and the enforcement agencies are taking heritage crime much more seriously than was perhaps the case in the past. Unfortunately, it happens, but we just deal with it.

Lucy Casot

We do not operate any sites directly, so we do not have that direct experience. It certainly happens and we would provide support where we could, but there is no clear role for us as a national development body in doing so, other than to provide advice if people come to us for that.

Thank you. That is very worrying but useful to hear.

The Convener

Mr Paterson, I know that two of my colleagues have asked for more information on areas of specific interest to them. It would be helpful if you could, when responding, cover the wider issues that you have mentioned and copy that letter to the committee.

Sarah Boyack

I echo that point. I was looking at the annex to Historic Environment Scotland’s written briefing, which refers to key performance indicators. Most of the KPIs have a green status; some are amber. However, the rating for improving or maintaining the state of Scotland’s historic sites and places is red. That really stands out. That issue has been quite a big part of our discussion today.

We used to talk about the need to spend to save as a way of helping future investment, but you are talking about the need to spend to save as a way of avoiding losing buildings. It would be very interesting to get your take on that. The evidence that you gave us is that the historic environment is not just good for who we are. The sector also brings £4.4 billion into the Scottish economy. For example, half our international tourists come to see heritage and 60 per cent of the heritage visits are to Historic Environment Scotland sites.

Will you give us a sense of what you need to do to deliver on that? You have gone through pandemic-related income reduction. You talked a bit earlier about flexibility and the levers that you need. Will you say a bit about public sector funding and then a bit about the flexibility that you want?

Alex Paterson

That is a big question. The red, amber, green diagram that you have relates to the report “Our Place in Time: The Historic Environment Strategy for Scotland”. That does not just cover HES; it relates to the overall historic environment sector. However, you are right: that KPI is red. That reflects the lack of investment or the lack of interventions in the historic environment collectively over time. There is no doubt that the situation has been exacerbated by Covid. Lucy Casot commented earlier that it is repair and maintenance budgets that gives way when cost of living increases start to hit. That just exacerbates our problem.

What flexibilities was I was referring to? I am a bit schizophrenic about that. When Covid hit us, Scottish Government colleagues and ministers helped us out hugely. That help was critical. However, we as an organisation cannot carry reserves across multiple years, and there are other restrictions that we cannot operate outwith.

The upside is that—if this is not unique to us, we are in a small category of organisations to which this applies—we have commercial levers. We have sites that we charge for and we have a subsidiary company that runs a lot of ancillary commercial activities. We think that there are further fundraising opportunities and other partnerships to make, but we operate within those constraints at the moment.

We could try to realise many of those opportunities. However, we have a concern. If that does not help us to invest in the historic environment and to improve the properties, the experience and the outreach and learning that we do, but rather is used to offset a reduction in grant in aid, there would be no net benefit.

We are actively discussing that with colleagues in Scottish Government at the moment. There are upsides and downsides, benefits and so on to it, but that is the flexibility that I was primarily referring to. We think that there are ways in which we could generate income if we had the ability to retain and invest that it into making the historic environment better not only as a physical set of assets, but in individuals and visitors’ experience of it.

Sarah Boyack

To be clear, it is not an either/or: you need continued capital investment in buildings and a bit of flexibility. The short-termism of funding is coming across really strongly, given the impact that that has on the whole of our heritage. I will come on to museums and galleries in a second.

Alex Paterson

Yes. Let us be honest: there will never be enough money to go round and do everything that we want to do or any of us want to do. A bit of flexibility in our model would give us a wee bit more scope to do that. That would also contribute to capital investment in our sites. There are all sorts of ways in which that would be beneficial.

In terms of looking forward and budgeting, the reality is that budgets are confirmed annually but that we must plan on the basis of multiyear projects. For our grant programmes, projects are over multiple years. We work on the basis on budgets over multiple years, albeit those are confirmed annually.

I think that it would be helpful—I think that the capital spending review and the resource spending review got us to this—to have indicative budgets over an extended period. That might even just be three years. I just used the phrase “indicative budgets”. Even if those were confirmed annually, that would be fine, but also having some sense as to what the parameters might be over a three-year period would give us a bit more of a planning horizon.

That is not just about us. If we had that model, we could apply that to the organisations that we support financially as well. From their point of view, the cost of living crisis is biting right now. Support for the sector must be considered. It is trying to recover from Covid but has now been hit by the cost of living crisis. An indicative budget over more than just one year would undoubtedly give a sense of comfort that many just do not have currently.

Sarah Boyack

Okay; thank you. I want to put that same issue to Sir John Leighton and Lucy Casot. In your written submissions, you both talk about short-termism. I think that the word “projectism” was used—that is, one-off annual spending.

One of the things that we have been taking evidence on is the contribution of culture to health and wellbeing. Both your submissions make quite powerful points in that regard. Will you say a bit more about that? Sir John, your organisation’s submission mentions the need for

“determined leadership from the Scottish Government.”

We have asked cabinet secretaries about that and their response has been to say, “It is coming at some point”. What leadership and investment would be needed to transform what you could deliver?

Sir John Leighton

Those are good questions. I will perhaps take them in two parts. First, is the issue of multiyear funding. I think that we all had high hopes for the spending review that was launched at the end of last year. There was a feeling of, “At last. After years of short-term funding, this would be an exercise that would give us perspective.” Unfortunately, that exercise seems in many respects to have been derailed by events. My organisation certainly could not to take anything from the published figures, apart from the conclusion that funding is flat right the way through. That is my interpretation of it.

The unfortunate thing for us is that I regard museums and galleries as intergenerational organisations. We have a very long-term vision. We have skills, knowledge and expertise that we develop over time. We have collections and estates that have to be nurtured over a long period. We have activities that require years of planning and investment. None of that responds well to short-term cycles of funding. We can always adapt to change and to different patterns of funding, but that takes time.

One of the underlying themes that we have been talking about is that, as a sector that is still in recovery, we need that time to get back to a position of normality. Alex Paterson mentioned that that might take until 2025. We could use that year as a benchmark. We need certainty, to get us back into a position in which we can restore a sensible business model. The lack of certainty discourages investment, deters sponsorship, and stifles innovation and any sense of risk taking. I think that that part of it is clear.

Secondly, on health and wellbeing, the frustration is that we know from our work the implicit benefits of offering safe social spaces—in the present context, offering warm safe social spaces—that people can go to. We also know the potential benefits of targeted programming, whether that is preventative work with disadvantaged teenagers for example, or whether it deals with people who are suffering from disease or forms of physical and mental illness. The evidence is there on that.

11:15  

The frustration is that things are fragmented. There is no real sense of any national strategy. As an individual organisation, we keep on doing our thing, which is where the projectism comes in. There are so many different examples of best practice, but none of it is really joined up.

The case for culture’s contribution to health and wellbeing is very well set out in the national partnership for culture’s report, which includes all the different factors and arguments. The Scottish Government’s response to that was published a day or two ago. The message coming from that is, “Yes, it all aligns with what we want to do, but there is no extra funding in the present fiscal context.”

I will be brutally frank. I am not interested in any new initiatives or programmes unless there are pounds attached to it. I currently do not have the resource, the capacity, the staff, and we do not have the time to divert energy from what Alex Paterson described as core business. A lot of it sounds as though it is still rotating in mid-air; it is rhetorical and very aspirational. I do not see any changes happening on the ground.

Sarah Boyack

Thanks. That is really clear. Given the comments that Jenni Minto made about the situation being “sobering”, your answer reinforces the need for money now and clarity going forward.

Lucy Casot, it was striking that you referenced 440 museums in Scotland and those organisations’ capacity to cope with the cost of living crisis and keep the doors open. Do you want to say a bit about multiyear funding and the need for more funding generally to get through this?

Before you answer, Lucy, I am conscious that we have only 10 minutes or so left, and I still have another member who wants to come in, so if you could be concise in your answers that would be helpful.

Lucy Casot

The reality is that our grants budget is £900,000 of revenue and £200,000 of capital across those 400-plus museums, so it is difficult to do anything substantial with that. The maximum award that we can make is £60,000, and that is an annual budget. It is a very different position from that in the arts sector, for example, where there is the possibility of three-year funding deals and so on. That is simply not available to the museum sector.

We are not unrealistic about the fact that change will have to happen in the sector, but the trouble with one-year budgets is that you tend to try to preserve what you have. You cannot have that longer vision, because you are thinking about how to save the thing that is in crisis today—and then the next day something else is in crisis. We need to see that change, and we need more collaboration and more integration.

We just funded a lovely project in which four museums came together to appoint a member of staff that they share in common. That is a great idea and a model that would be possible elsewhere. It was the result of long-term partnership working that was already established.

That is where investment is needed. If you have a longer-term vision, you can see how some of those things might become possible. That would be the greatest benefit if we had longer-term funding and could make project grants over a slightly longer time. We could also make grants to groups of museums, potentially.

We talk in our submission about civic museums. They could have potential to collaborate on some services that are not affordable to everybody, and they could collaborate on conservation or storage of collections.

It takes that bit of investment to make that change so that strategic planning actually happens, as opposed to organisations trying to plug the gaps, which is where we are at the moment. There is a real concern and there would be a great opportunity if we could see longer-term funding, as we would be able to be more strategic about the change that will come. It is not realistic to think that we can save everything and we must not be naive about that.

Alasdair Allan

I will be brief. I am afraid that I am coming back to Alex Paterson again. I hear and I absolutely appreciate what you are saying about the inflationary and other pressures that are applying to you, the whole public sector and the Scottish Government itself. People can readily appreciate what you are saying about them.

I had vowed not to mention any building in my constituency but, as almost everyone else has, I will, I am afraid, again mention something that we have corresponded about, which is one of the most iconic buildings in Scotland, Kisimul castle, and the fact that it is not open to the public.

More generally, you said that 60 buildings had restrictions on opening at the moment. Given—or despite—the pressures, is your organisation in a position to lay out a plan or timescale as to when you would get as near to full opening as possible?

My other question is related to that. You mentioned, rightly, the importance of spending to save or to not allow problems to grow. Are there certain maintenance risks associated with buildings being closed?

Alex Paterson

We are trying to fix up another meeting on Kisimul. All that I will say here is that we have had technical teams and visitor teams out to look at what the art of the possible is in Kisimul. We will pick that up separately.

On the timescale for site openings, that is awfully difficult, and I will tell you why. Until we actually do the inspections and find out the scale of the challenge—whether it is great or small—it is difficult to know what the timescale is. I suspect that, with some of the sites that we inspect, we will know that we have quite a big task, and we may have restrictions in place for a period of time while we develop a scheme to consider them.

There are other sites—St Andrews castle, which I mentioned earlier, Burleigh castle and others—where we have done the inspections and we have been able to open them because there were no issues or because the issues were quite minor. Trinity house is opening again quite soon.

That is an inadequate answer, because the answer is that, site by site, we need to see what the inspections throw up before we can plan what maintenance and repair is required and, therefore, what the timing for opening will be.

It is the question that I am asked most often: when will my site be open? I can do no more, I am afraid, than to say that once we have inspected, we will then know what that might look like.

That was quicker than I thought it would be. Are there any final questions in the last few minutes that we have?

Sarah Boyack

It would be good to get that list. I think that about 20 per cent of our historic buildings or sites are not able to open at the moment, so it would be useful to get the scale of the issue. It is a fundamental issue, as it is not just one or two areas that are affected. Dealing with the issue is significant in terms of rebuilding tourism and restoring our culture.

I recently asked about employment issues in Historic Environment Scotland, and it came out that there was a real issue in terms of gender and pay. What are you doing to improve opportunities in the sector, particularly for women? I think that women were doing okay in band C and one right at the top but, in all the other bands, women were doing less well in terms of employment opportunities.

Alex Paterson

We do not have an issue with our gender pay gap, because it is really small. There will be a difference in the gender profile across some of the roles that we have. For example, a lot of our monument conservation unit teams—our colleagues who are out on our sites, maintaining and looking after them—would predominantly be male. There is a profile difference across some of the roles. However—I am saying this off the top of my head—I do not think that we have a major issue in the male-female gender split across the organisation.

On what we are trying to do about it, where we have, for example, an imbalance in the gender profile—such as in our conservation teams in particular—we are encouraging female apprentices and others to come and join us. We have a number of female craft fellowships who have joined us recently.

I will take the question away and ask it of my people director, but if you asked me whether we have a major problem in terms of either gender balance or the gender pay gap, I would say that I do not think that we do.

It would be good to get that feedback to compare with the stats that your team gave me earlier. Thank you.

The Convener

That concludes questions. I thank our witnesses for their attendance. We have a final evidence session on the budget next week, followed by a session with the cabinet secretary on the evidence that we have taken.

Meeting closed at 11:25.