Constitution, Europe, External Affairs and Culture Committee Pre-Budget Scrutiny 2025-26

National Galleries Scotland looks after one of the finest collections of art anywhere in the world on behalf of the people of Scotland. The collection consists of around 130,000 works of fine art and is displayed to the public at the following locations:

• Scottish National Gallery at the Mound
• Scottish National Portrait Gallery in Queen Street
• Scottish National Gallery of Modern Art in Belford Road (Modern One and Modern Two)

NGS is a national institution and a Non-departmental Public Body. The principal functions of the Board of Trustees of NGS are set out in The National Heritage (Scotland) Act 1985. Our primary role is to care for, research and develop the national collection of art, ensuring that the public has the greatest possible access and that we promote Scotland's international reputation for art and culture.

Planned budget increases should be prioritised towards anchor funding for core services and/or ‘spend to save’ initiatives in order to improve the financial sustainability and resilience of organisations funded through the culture portfolio and therefore leading to improved cultural outcomes.

The ‘perfect storm’ identified in previous budget rounds is still in full effect and the three areas of public funding, operating costs and income generation are still significantly challenging. Although NGS ultimately achieved a balanced budget for 2024/25, the financial year 2025/26 and beyond present a significantly challenging financial picture.

For NGS, since 2019-20 our resource grant in aid budget has increased by £4.6m with £4.3m of that funding increased pay costs (SG pay policy) over that period with staff numbers held at the same level as 2019-20. With staff costs at 93% of grant-in-aid, we are now at the minimum resource level needed to care for and provide access to the national collection and to generate income needed to supplement public funding.

The remaining 7% of grant in aid does not cover the cost of managing and running our estate including increased utility costs for environmentally controlled buildings needed to care for the national collection. Our utility costs have increased significantly over the past three years. We are now increasingly reliant on earned and contributed income for our core funding.

There is however an opportunity on income generation. Our visitor numbers have just recovered to pre-Covid levels with a significant increase due to the recently re-opened Scottish galleries at the National. However the cost of living crisis is impacting our customers in terms of what they are prepared to spend with their value expectations increasing. We work hard to secure private investment (including from philanthropic sources) and have been successful in the delivery of large capital projects, through which we have been able to significantly improve our offer to visitors.

However, a longer-term view of how the culture sector will be supported, coupled with adequate Scottish Government funding is a pre-requisite of creating confidence in the sector and leveraging both public (from non-government sources) and private support into culture and heritage.

Generating the required level of incoming investment and support is only achievable when built on the firm foundation of our core services, and the challenge is in our core funding, which private investors are not motivated to support. There is also intense competition for private investment as all heritage and culture organisations find themselves in a similar situation.

The right level of investment into core services (anchor funding) and incentivising income generation (‘spend to earn’) will support NGS in becoming more financially sustainable and resilient.

The original cultural strategy published in 2020 set out a wide range of commitments and ambitions but was widely felt to be too abstract and diffuse. There is a need for a focussed approach to key outcomes relating to inclusion and equalities, environmental sustainability and the role of culture in promoting health and well-being. The Culture Strategy Action Plan provides the focus to do this but could be expressed in a more measurable and impactful way. It does create a need for improved collaboration both within the sector and across portfolios. The Culture Partnership Agreement referenced in the Action Plan may be a key contributor to this, although the action plan does not expand on which organisations would be part of that partnership.

With greater strategic focus on measurable impact and alignment across cultural bodies, it should be possible to better target funding towards clear outcomes. There does however need to be a recognition that a large majority of cultural organisations do not currently have a strong and resilient foundation to build upon to deliver cultural outcomes in a meaningful way and investment should be prioritised towards this.

As we have previously stated, it will not take much to shift the dial and have a big impact. Culture is not a problem to be solved: culture is the solution and an asset to be exploited. Museums and Galleries Scotland research undertaken in 2023 found that for every £1 of core funding provided to museums and galleries, the economic output generated is more than double this at £2.67.

NGS can play an important part in recovery and regeneration in Scotland over the coming years and it is our ambition to ensure we work across key issues in society, including health & wellbeing; the climate emergency and in playing our part in addressing inclusion and inequality.

Adequate investment is required for culture with a target for a minimum of at least 1% of overall spending budgets in Scotland. According to the Campaign for the Arts, the United Kingdom ranks among the lowest spender on culture, both as a percentage of GDP and per person. NGS supports Culture Count’s call for investment in culture to be increased to 1% in line with the 2019 CEAC report Putting Artists in the Picture which recommended that culture should establish a baseline target for national arts and culture funding above 1% of the Scottish Government’s overall budget, supported, on a cross-portfolio basis, in line with the recommendation of the Cultural Commission. We support the long-term goal for 1% of overall Scottish Government expenditure towards culture. This will bring us closer to the levels of investment across Europe, where the average is 1.5%.

There has been little progress made in the area of multi-year funding. We await the publication of the Scottish Government’s medium-term financial strategy to see if that provides any indication of future year funding scenarios. With multi-year funding the opportunity to plan for a dynamic and confident public offer is possible and ultimately makes more impactful programmes—both national and international. It also improves efficiencies across the board with better planning and performance.

Our ambition is to more widely share the national collection with the people of Scotland and beyond; building on existing partnerships and creating new collaborations with museums, galleries, and communities around the country so that everyone can explore and discover art. We do not see the collection as something static available only at our physical sites in Edinburgh, we have the potential to share more widely with audiences all over the country and internationally whether that is facilitating an in-person experience or an online engagement.

The opportunity for mainstreaming culture across portfolios and developing cross-portfolio funding for culture comes in the form of The Art Works project development in Granton. The Art Works is a true sustainable development project from NGS. It combines economic environmental and social sustainability and is a clear demonstration of how arts and culture can contribute to the national economic recovery and the government’s community investment agenda.

Through this project, NGS brings culture into the placemaking philosophy and allows NGS to play a vital role through its work with local partners to improve education, wellbeing, health, and economic outcomes in one of the most deprived areas of Scotland.

The design for The Art Works is an environmental construction exemplar: we are using
Passivhaus principles and the Art Works will be the first major cultural building to achieve Passivhaus accreditation in Scotland. The building is also being designed to ensure that it can achieve Net Carbon Zero.

NGS is not in receipt of Creative Scotland funding. However we understand there is anxiety within the sector that the current demand outstrips resource and more generally there is confusion as to who/what is funded by Creative Scotland which only serves to undermine the confidence of the sector. This has an impact on NGS, as many of our partners (whether at organisational or individual level) are experiencing a precarity that hinders engagement/involvement with us. NGS experiences an indirect impact while also fielding the confusion and lack of clarity in the funding programme both at public and sector levels, further confused by different operating models in rest of UK where Arts Council England (equivalent of Creative Scotland) does fund national collecting bodies.

Scottish Government policy on fair work and inclusive workplaces states that ‘fair work means secure employment with fair pay and conditions, where workers are heard and represented, treated with respect and have opportunities to progress... fair work and reducing workplace inequalities are central to our work to transform Scotland's economy, ensuring that everyone is able to contribute’.

NGS is a body covered by the SG pay policy and is currently planning to introduce the 35 hour working week from October 2024.

Equality, diversity and inclusion is one of the strategic priorities for the National Galleries of Scotland. We are working towards embedding anti-racism, anti-ableism and broader anti-oppression principles in our activities. Our current EDI commitments include increasing the number of people with under-represented protected characteristics applying for paid and volunteer roles.

With regard to the gender pay gap, our statutory report in 2023 showed that overall, male employees earn less than female colleagues, due largely to the fact that there are more females than males in the higher pay bands.

People managers have had training on the topic of inclusive recruitment and new job boards are being used for all NGS adverts (LGBTjobs.co.uk, DisabilityJob.co.uk and BMEjobs.co.uk). Equal opportunity questions have been built into our new recruitment system to enable more effective monitoring of the protected characteristics of applicants. We have also been seeking to attract applications to our freelancer pool from creative professionals who are Black or from marginalised ethnic groups and/or disabled as well as creating paid opportunities within our events programme.

Over the last few years we have worked to recruit volunteers with under-represented protected characteristics through work with local community groups and institutions. We have worked with volunteer organisations such as Make Your Mark, Volunteer Edinburgh and Volunteer Glasgow to help with this recruitment, as well as groups such as Into Work, Barnardo’s, Community Renewal, Deaf Action & Impact Arts. Volunteers were also recruited during International Women's Day in order to improve representation of female artists in the collection on Wikipedia.

We have also committed to working with all colleagues to ensure everyone understands the contribution they can make in creating a workplace culture that respects and values EDI. This includes a comprehensive training programme, an open invitation to colleagues to attend the Equalities Steering Group, the establishment of the Queer Colleague Network and the inclusion of diversity and inclusion questions in the staff Perspectives survey. When we launched our new HR system last year, we took the opportunity to ask colleagues to update their EDI information and explained the importance of doing so.

NGS has recently been accepted onto a new anti-oppression training programme, Museum Transformers, developed and delivered by Museums Galleries Scotland. 40 colleagues will take part in this over the next 2 years.