Government urged to use new legal powers to protect collections at risk

Whilst continuing to advocate for a comprehensive recovery and resilience package to ensure the survival of the museum sector, Collections Trust (CT), the Association of Independent Museums (AIM) and the Museums Association (MA) are urging the government to protect the collections of those that do go into administration, specifically by using new powers created in the Corporate Insolvency and Governance Act 2020, which became law on 25 June.

The Collections Trust, MA and AIM have been vocal about the risk to museum collections caused by the current crisis. In its submission to the DCMS select committee Covid-10 enquiry, CT spelled out the problem: when a museum that is a company – even a charitable one – goes into administration, the receiver must usually treat its collections as financial assets and realise their value on behalf of creditors. If the feared museum closures occur, “a large part of Britain’s cultural heritage may suddenly come up in a fire sale,” as Baroness Barker put it during the third reading of the bill just passed. Her Lib Dem colleague Lord Fox added: “While it may not be possible to save a museum, it should be possible to save a collection, but, when very many collections are going up for sale at the same time, clearly the capacity to deal with that is eliminated.”

The government has acknowledged concerns that collections will be at risk if independent museums become insolvent. Earl Howe, the Deputy Leader of the Lords, said last week that: “We are actively exploring a range of ways to support them at this time… This is active work in progress and we fully recognise the concerns that have been raised about museum collections.”

The CT, MA and AIM are urging government to follow up with action. The new Corporate Insolvency and Governance Act allows the Secretary of State for Business to bring in further regulations via statutory instrument which would offer temporary protection to collections at risk by delaying sale and giving breathing space for sector bodies to intervene as they would in normal times.

CT, AIM and the MA urge the government to move swiftly on this specific point in anticipation of possible insolvencies in the coming weeks, while redoubling its efforts to minimise the number of museum closures due to Covid-19.