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New law to stop museum 'fire sales' considered

Mary Rose Museum
Mary Rose Museum

Museums could be given new safeguards to prevent "fire sales" of priceless artefacts if they go bust as a result of Covid-19.

Ministers are considering changing the law to prevent collections being broken up and sold off as part of a typical insolvency process.

The disclosure comes as the sector warned that there was now a "real possibility" of some independent museums becoming insolvent following months of lost revenue during their peak season.

The Mary Rose Museum in Portsmouth, which houses a 19,000 item Tudor collection, has warned that it was in "mortal peril", while the Florence Nightingale Museum in central London said it faced an "absolutely huge challenge" to survive.

Oliver Dowden, the Culture Secretary, has said that he is drawing up a bailout package for the arts, stating: “I am not going to stand by and see our world-leading position in arts and culture destroyed."

But museum chiefs believe such a scheme could come too late for some struggling institutions and have been privately lobbying for new protections to ensure that collections are not sold off as part of an insolvency process if some museums go bust.

Alistair Brown, policy manager at the Museums Association, said: "The possibility of independent museums becoming insolvent due to the coronavirus crisis is real, and it raises the prospect of museum collections and buildings being broken up and sold off as assets of insolvent organisations. Such an outcome would reverse decades of hard-won development and investment, and the potentially irretrievable loss of public access to much of our heritage.”

In a letter to Baroness Barker, a Liberal Democrat peer who has lobbied ministers on behalf of the sector, Earl Howe, a government frontbencher in the House of Lords, said: "The Government understands the risk that insolvency poses to museums and their collections. Led by DCMS [The Department for Digital, Culture, Media & Sport ], we are currently looking at options, including legislative, for how we may be able to prevent the dispersal, and therefore potential loss of these collections."

A mock-up of Florence Nightingale's bedroom at the museum dedicated to her
A mock-up of Florence Nightingale's bedroom at the museum dedicated to her

Lord Howe's letter followed a Lords debate in which Lady Barker warned that without new protections, many artefacts could be sold off in fire sales - the name given to the sale of assets at heavily discounted prices when a firm is being liquidated.

She said: "We have a number of independent museums—not the large museums set up under an Act of Parliament, nor those associated with local government—and they are typically charitable companies. They have a very big fear. If they are in danger, and a number of them currently think that they may well be, their collections immediately become part of the assets of any insolvency procedure.

"The big concern is that, if there is no exemption for those assets in regulations, later on this year a large part of Britain’s cultural heritage may suddenly come up in a fire sale. That would be extremely damaging, not just to those organisations but to the local economies that they support."

Mr Brown said: “We need to see a package of government support for the sector so that museums can survive this year – but we also need to plan for worst-case scenarios, and we are encouraging government to use new powers created in the Corporate Insolvency and Governance Act 2020 that would allow the government to offer temporary protection to collections at risk by delaying sale and giving breathing space for sector bodies to intervene.”

Helen Bonser-Wilton, chief executive of the Mary Rose Museum, said she was having to raise at least £2.2 million to cover the costs of maintaining Henry VIII's warship and the rest of the institution's Tudor collection with the help of complex environmental controls to ensure the correct temperature and humidity.

With the help of the Government's Jobs Retention Scheme to help pay more than 80 per cent of wages during the lockdown, and a major fundraising drive, the museum has covered almost half of its costs. "But if I don't raise the extra £1.1 million by the end of this year, we will go bust," Mrs Bonser-Wilton said.

She added: "We are at risk of an absolute bonfire of our culture and heritage at the moment. "We are a British icon - we should be one of the reasons for coming to the country in a post-Brexit Britain. "If you lose museums like us you're losing the essence of what Britain is all about."