Budget 2024: what does it mean for museums? Museums ...

Chancellor Rachel Reeves has delivered the first budget of the new Labour government, outlining a 1.5% rise in government day-to-day government spending funded through tax rises of £40bn.

In the first Labour Party budget for 15 years – and the first ever in UK history to be delivered by a female chancellor – Reeves promised to restore economic stability and rebuild Britain. “The only way to drive economic growth is to invest, invest, invest,” she said in her opening statement.  

Museums, culture and heritage

The Department for Culture, Media and Sport will see its settlement increase by 2.6% to £2.3bn in 2025/26. This includes £3m to expand the Creative Careers Programme.

The budget promises to increase support for arts and culture by raising grant-in-aid for national museums and providing a package of cultural infrastructure funding that “will build on existing capital schemes”. Additional capital investment will be made available to support cultural organisations across the country.

Reeves also promised funding to deliver major events and ceremonials to mark VE and VJ day next year, and a programme of activities to commemorate the lives lost in the Covid pandemic, build a positive legacy and support future resilience.

As previously announced, from 1 April 2025, the rate of museums and galleries exhibitions tax relief will be set at 40% for non-touring exhibitions and 45% for touring exhibitions.

Taxes

Against a background of a £22bn public funding blackhole, hundreds of unfunded measures and “broken public services”, Reeves said she had no choice but to raise taxes by £40bn.

The budget marks “an end to short-termism”, Reeves said, before saying restoring economic stability in her key focus in the budget and for the duration of this Parliament. The government’s target not borrow to fund current spending will be met in 2029/30, she said.

Reeves says there will be a 40% relief on business rates for retail, hospitality and leisure.

Other relevant tax announcements in today’s budget include:

• Freezing fuel-duty next year – at a cost of £3bn.
• Increasing the lower rate of capital gains tax from 10% to 18% while the higher rate will go up from 20% to 24%,
• Freezing inheritance tax thresholds until 2030, bringing inherited pensions into inheritance tax from April 2027 and reform agricultural property relief and business property relief from April 2026.
• Tax incentives to support the take-up of electric vehicles.
• Introducing VAT on private-school fees from April 2025. The impact of this will be discussed at the MA’s forthcoming event The Future of Museums: School Programmes.
• Increasing the state pension and the amount people can earn before they lose their carers’ benefit.
• Abolishing non-dom status.

The Bank of England’s inflation target will be maintained at 2%, with inflation now forecast to be 2.5% this year and 2.6% next year. Reeves also shared growth figures that show GDP will increase 1.1% in 2024 and up 2% in 2025.

Wages

Reeve said the government will not increase National Insurance, VAT or income tax for working people.

Employers’ National Insurance contributions will rise from 13.8% to 15% next April. But the threshold at which businesses start paying National Insurance contributions will be lowered to £5,000 from £9,100.

As per plans previously released, the National Living Wage would increase from £11.44 to £12.21 an hour from next April – a 6.7% increase worth £1,400-a-year for full-time workers. The National Minimum Wage for 18- to 20-year-olds will also rise from £8.60 to £10 an hour, which the government says is the first step towards aligning the National Minimum Wage and National Living Wage to eventually create a single adult wage rate.

Apprentices’ minimum hourly wage will also increase in April.

Reeves announced £240m to help people back into work through the “Get Britain Working” scheme. It will be followed later this autumn with a white paper setting out the government’s plans to break down barriers to work.

Funding and investment

Reeves said there would be “no return to austerity”. Day-to-day government spending will rise by 1.5%, she said, with more investment in public services. Local government will receive £1.3bn in additional grant funding, including £600m for social care. Integrated settlements will be made to Greater Manchester and the West Midlands next year, “allowing them to take more control of their spending”.

Overall, Reeves says the government will invest £100bn in capital spending over the next five years.

Relevant investments announced today include:

• An additional £2m next year on Holocaust remembrance and education.
• Funding for public services in the devolved governments in Northern Ireland (£1.5bn), Wales (£1.7bn) and Scotland (£3.4bn).  
• £500m in 2025-26 to deliver Project Gigabit and the Shared Rural Network, to drive the rollout of digital infrastructure to underserved parts of the UK.
• Raising the bus fare cap from £2 to £3 until December 2025.
• Funding for the rail network, including the Trans-Pennine upgrade connecting York, Leeds, Huddersfield and Manchester.
• An additional £6.7bn to the Department for Education next year. And £1bn increase in funding for special educational needs and disabilities.

Sector reactions

Sharon Heal, the director of the Museums Association, said: “While we were pleased to see the increased investment for National Museums in England, and the announcement of much-needed capital investment, we are extremely disappointed that the urgent needs of local and regional museums and galleries have not been addressed in this budget.

“Local museums were already facing the brutal realities of redundancies, site closures, reduced public access and for some the threat of sale of collections or insolvency.

“And while we welcome measures to support the lowest-paid workers through increases to the minimum wage and national insurance contributions, we know this will put pressure on already over-stretched budgets and will mean many civic museums will be worse off after the budget.

“The museum sector desperately needs a government-led strategy for sustained investment in civic museums and in the short-term we are urging funders such as Arts Council England to take into account the extra pressures on museums in their funding agreements.

“Museum sector bodies will now continue working in partnership to make the case to Government for adequate and long-term investment in all UK museums, including in preparation for the upcoming Spending Review in Spring 2025,” Heal concluded.

Sue Ferns, senior deputy general secretary of Prospect union, said: “An increase in grant-in-aid funding for our world-class national museums and galleries is long overdue and would provide stability after some difficult years.

“It is unclear however how much of this will be available to support current budgets, which are critical to recruiting and retaining the sector’s expert and dedicated staff.

“It remains a tricky time for the sector, which remains underfunded despite the huge cultural and economic benefits it brings. If we want to maintain our global reputation then we should fund it properly.”

Jenny Waldman, director of the Art Fund, said: “While we’re pleased to see that the government has committed to increase core Local Authority spending power by around 3.2% in the Autumn Budget, and promised some much-needed support for national museums and galleries through increased grant-in-aid funding, and capital investment, the Budget falls short of addressing the urgent and long-term challenges facing the sector, particularly for civic museums.

“Three quarters of UK adults say having a local museum adds value to their area. Museum play a central role in rebuilding communities, bringing people together and inspiring audiences through their collections. We will continue to make the case for long-term investment in all UK museums to safeguard these vital spaces of inspiration for communities both now and in the future. “

Sara Wajid, co-CEO of Birmingham Museums Trust, said: “While we welcome the overall uplift for DCMS, this budget leaves us worse off and we are already in a dire financial situation in Birmingham. We look forward to discussing solutions with the treasury to protect the world class cultural heritage for the people of the west midlands and the nation.”

Tony Butler, executive director at Derby Museums, said: “On first reading there doesn’t appear to be any assistance in the chancellor’s budget to address the financial crisis facing regional museums. Moreover, the above inflationary increase in the National Minimum Wage and increase in National Insurance contribution will put even more pressure on already fragile museum organisations.

“I am delighted for colleagues in the large national museums, predominantly in London, who have received a commitment to increase their aid. I and my regional museum colleagues look forward to further discussions with the Treasury and Department for Digital, Culture, Media & Sport.”

Amy Brettell, the managing director of Zurich Municipal, said changes for National Insurance contributions and living wages would have huge ramifications for charities.

“Absorbing the additional cost at such short notice could see critical services cut if additional funding cannot be raised,” she warned, “At a time when financial pressure on the voluntary sector is already so acute, making them exempt from this is essential for the survival of many to allow them to continue to fulfil such a vital role in society.”