DCMS-sponsored museums and galleries are now more reliant on self-generated income sources that are vulnerable to wider economic factors, a new report has found.
Today, the National Audit Office (NAO) published a report on the financial resilience of the 15 museum and gallery charities sponsored by the Department for Culture, Media and Sport.
The public spending watchdog found that these organisations increased their self-generated income from £368m in 2021-22 to £563m in 2024-25, a 53% real-terms increase.
Its report says “self-generated income sources are riskier and more susceptible to external factors, such as tourism costs like travel and accommodation, and exchange rates”.
Since ending its emergency Covid-19 funding in 2021-22, DCMS’s grant-in-aid to the 15 organisations has fallen by 16% in real terms, to £484m, according to the report.
At the same time, the 15 organisations’ costs have risen by 18% in real terms, driven by higher staff costs due to increases in pay and numbers after lay-offs during the pandemic.
A worse financial position
The report finds that the overall financial position of the 15 organisations had worsened by early 2025, with some needing extra short-term funding from DCMS to continue operating.
By the end of 2024-25, they held £81.2m in unrestricted and undesignated reserves, an 18% decrease in real terms from a high at the end of 2022-23.
Between 2021-22 and 2024-25, their combined staff costs increased by 19% in real terms, and were 10% higher in 2024-25 than the pre-pandemic average.
Of the 15 charities, 14 reported that increased staff costs had been their top financial challenge in recent years, while a third said they had addressed challenges by making redundancies, not filling vacancies or having fewer staff on duty.
Overall, the number of permanent employees fell from 6,992 in 2019-20 to 5,887 in 2020-21, before rising to 6,804 in 2024-25.
Nearly all organisations reported higher operating costs, and six reported higher costs for professional services such as legal advice.
Although visitor numbers have recovered since the pandemic, in 2024-25 they were 13% below the annual pre-Covid-19 average (42 million compared with 48 million).
However, the report says that six of the 15 organisations – all based solely or mainly in London – had more visitors in 2024-25 than before the pandemic.
Overseas visitors have been slow to return, with 19.4 million visiting the organisations in 2024-25 compared with an average of 22.6 million before the pandemic.
The report highlights a change in the behaviour of visitors, who it says are increasingly selective about their leisure activities and discretionary spend.
“Even among international audiences, who tend to spend more at museums and galleries than domestic visitors, inflationary pressures have resulted in lower real-terms spend in London, and fewer first-time visitors mean museums and galleries must attract returning tourists,” it reads.
Concerns about delivering core objectives
The report warns that cost-containment measures could impact the 15 organisations’ ability to preserve their collections and maintain free access.
A third told the NAO they are concerned about their ability to deliver these core objectives over the next three years, with 20% focusing on their service offering to control costs.
The report notes that boards play an important role in ensuring the financial resilience of these organisations.
As of 9 October 2025, there were 34 vacancies across their boards (a 15% vacancy rate), with vacancy rates of 25% or above at four organisations. The average time to make board appointments in 2024-25 was 219 days, which is more than the 90 days set by the government.
“According to DCMS, the delays in 2024-25 were, in part, due to the July 2024 election and subsequent change of government, and membership of all museum and gallery boards was at a sufficient level during the year for them to be quorate and so able to carry out their functions,” the report says.
“However, delays to appointments can mean that museums and galleries’ board-level capability gaps aren’t addressed as quickly as required.”
The report notes that DCMS has taken steps to provide museums and galleries with additional short- and longer-term financial support, with £31m provided for 2025-26.
However, it urges DCMS “to have a good understanding of the financial resilience of the museums and galleries it oversees so it can take a proactive approach to dealing with underlying issues before they escalate”.
Committee of Public Accounts’ response
Geoffrey Clifton-Brown, chair of the Committee of Public Accounts, said: “The country is home to some of the finest museums and galleries in the world, with sponsorship by DCMS resulting in free access to permanent collections.
“The years following the pandemic presented significant challenges to the financial resilience of museums and galleries, with lower visitor numbers and rising costs.
“It’s worrying that the National Gallery has recently announced significant cuts to public programmes to cover its growing deficit.
“DCMS has taken steps to provide museums and galleries with additional support, increasing funding and improving its approach to funding provision.
“At the same time, museums and galleries have found ways to increase their self-generated income and reduce staff-related costs.
“However, work must continue to address gaps in DCMS’s oversight and monitoring to support financial resilience, putting in place the right structures so that financial risks can be managed early on.
“It’d be in DCMS’s remit to consider the different options for introducing a small fee for visitors.”
