Written evidence submitted by the National Trust
Impact of Covid-19 on DCMS Sectors
11 May 2020
With our staff, members, volunteers and supporters, the National Trust is the biggest conservation charity in Europe. We protect and care for places so people and nature can thrive. Many millions share the belief that nature, beauty and history are for everyone. So we look after the nation’s coastline, historic sites, countryside and green spaces, ensuring everyone benefits. For everyone, for ever.
Introduction and summary
- The Trust is Europe’s largest conservation charity – we look after over 500 homes, castles, gardens and parks across England, Wales and Northern Ireland. We were founded 125 years ago to look after places of beauty and historic interest for everyone, for ever – a mission which continues to drive our work today. Our historic and natural assets are essential to the unique visitor experience offered by our country, and we are custodians of some of the country’s most iconic tourist sites, such as Fountains Abbey and the Giant’s Causeway. We also look after sites of everyday community heritage, from Birmingham’s Back to Backs to the Beatles’ Childhood Homes in Liverpool and run 145 accredited museums (nearly 1 in 10 of all accredited museums in the UK). We also have a long history of working with volunteers as a civil society organisation.
- The impact of Coronavirus on us and the sectors that we work with is already very significant: we estimate that our losses could amount to £200m this year. However, the full extent will not be known for some time yet. There is much uncertainty still about the duration of the current lockdown, and around how quickly and uniformly, sectors such as tourism, heritage and environment, will be able to return to business as usual. However, access to nature, green space and countryside has never been more valued or important and our historic places and collections are part of our essential shared heritage that helps bring us together as a community. According to recent polling, the vast majority of the public (84%) are planning to go to a visitor attraction when this is ‘over’, and historical sites were among the most mentioned places that people were intending to go (Kokoro Tracking). Organisations such as ourselves therefore have an important role in helping people, communities, and the nation through this time, and we have much to offer in terms of helping the recovery once we are out the other side.
- We’re working hard to continue to connect people to nature, history and culture through our online presence, communications work and social media channels during this time. When the immediate crisis has passed, reopening and expanding access to these things will play a key part in supporting an effective recovery and delivering a better future for everyone. In order for this to be the case, the charity sector needs to emerge from this situation intact. It is a key pillar in society, offering significant public benefit and service, and will be essential in delivering a positive, green recovery that helps the nation, communities and individuals alike.
- The following response focuses primarily on the National Trust’s own experience, but we support the calls and concerns being raised by our wider sectors, including by the Heritage Alliance, Tourism Alliance, and Wildlife and Countryside Link (all of which we are members). This response sits alongside the submissions of those organisations, as well as the joint submission put forward by the Museums Association, National Museums Directors’ Council, Association of Independent Museums, the Heritage Alliance and ourselves.
What has been the immediate impact of Covid-19 on the sector?
- Coronavirus is already having a significant financial impact on organisations across the full range of DCMS sectors, and the Trust is no exception to this. We rely on the support of our members, donors, volunteers and grant-making bodies, as well as income from commercial activities such as retail and catering, to look after the places in our care. More than 90% of our land is held inalienably, so it cannot be sold or developed without the consent of Parliament. This means we have a duty to look after these places forever, for the public to enjoy, and our financial decisions must prioritise this ongoing duty of care.
- All of our pay-for-entry sites, including cafes and shops have been closed since mid-March, and will remain so until government advice supports reopening. This means that we are experiencing a complete loss of visitor income during what would otherwise be one of our busiest periods. Beyond the immediate loss of trading income, we have also seen some membership cancellations from those who feel they can no longer afford it, or that they can’t take full advantage of its benefits in the current circumstances. In response we have offered a three-month payment break to help retain members who might otherwise leave us, but we’re also not seeing the additional new memberships taken out that we would otherwise have expected to see during this period. We estimate these impacts together are likely to amount to a shortfall on budget of up to £200million this year. This is despite carrying out significant cost saving measures, including retracting pay rises, making deep non-staff cuts in both day-to-day and project expenditure, freezing recruitment and using all Government support available, including furloughing up to 80% of Trust staff.
- The impact of this reduction in income streams due to closure, combined with a slow recovery in our visitor volumes and memberships, will be significant, with longer-term repercussions for the Trust’s activities. This risks affecting both our ability to care for our historic buildings and countryside on a day-to-day basis, and our longer-term conservation goals, for instance our pledge to plant 18,000 hectares of woodland in the next ten years and to achieve net zero by 2030.
- The National Trust has been around for 125 years this year and its leadership is clear that it can and will take critical steps to ensure it will continue to meet its charitable aims long into the future. For the Trust, the immediate response has primarily been about limiting unrecoverable costs over the coming months while our trading and membership income is heavily reduced. However, for the wider sectors and partners with whom we work, urgent issues of liquidity and cash flow are still a significant concern. Jobs are still at risk across the sectors we work with – as are the futures of our natural and historic places and collections. We must protect these key assets which will be integral to the long-term recovery of the nation.
Medium to long term impacts and delivering a post-Covid-19 recovery
How effectively has the support provided by DCMS, other Government departments and arms-length bodies addressed the sector’s needs?
What will the likely long-term impacts of Covid-19 be on the sector, and what support is needed to deal with those?
How might the sector evolve after Covid-19, and how can DCMS support such innovation to deal with future challenges?
- We have welcomed the engagement from Ministers and officials since the coronavirus crisis began, and appreciate the unprecedented nature of the support to businesses and employers that the Government has put in place. The Minister for Sport, Tourism and Heritage has been convening regular meetings with stakeholders from the Heritage Council, and this has been a useful opportunity to raise issues and discuss the situation. Similar forms of engagement have also been taking place with the tourism, museums and other sectors.
- As noted above, we have taken immediate and substantial cost-saving measures, alongside making use of the Government’s Job Retention scheme, which has reduced the immediate pressure on the organisation’s finances. The extended business rates relief offered to the tourism, leisure and hospitality sector has also been welcome. However, we believe that there are as yet unresolved issues in a number of areas which will affect the longer-term prospects of our sectors, which we describe in more detail below.
- Although there have been substantial short-term challenges for us and our wider sectors, we believe that the biggest impacts will be seen in the medium to long-term. As referred to above, the impact on membership is particularly concerning, as this depresses income over a matter of years, not just months. Members provide a stable source of income for charities over a year, unaffected by seasonal patterns and weather events. They also feed into all other revenue streams, from retail activity to legacies and donations. Unless there is a strong immediate recovery, the recruitment of lost member numbers will take considerable time and effort for charities and will be affected by the external economic context. For the National Trust, the sustained loss in income we are experiencing puts our entire investment programme at risk, with non-essential work for this financial year already paused.
- This will affect all areas of our work: from nature conservation to investments in infrastructure for the visitor economy. As the largest private landowner in the UK, a significant part of our investment programme was directed to delivering ambitious environmental targets, including the creation of 18,000 hectares of new woodland by 2030, and the creation and restoration of 25,000 hectares of new habitats. This work directly delivers on the Government’s own targets for environmental restoration, as set out in the 25 Year Environment Plan and woodland creation plans.
- Our conservation programme also helps maintain our historic sites and buildings, which play an important role in the UK’s tourism offer, both domestic and international. As the Tourism Sector Deal outlines, visiting our heritage is the number one reason international visitors choose to come to the UK. With financial impacts as predicted, our ability to look beyond essential maintenance will be seriously challenged, and to invest in conserving our historic buildings, collections and gardens, as well as work to protect urban heritage in our towns and cities will be limited.
- There is a significant degree of interdependency within our sectors: when the operations of one organisation is disrupted this has impacts elsewhere in the supply chain, and endangers projects being delivered in partnership. The Trust’s financial loss and reduced spending power will have knock-on impacts on suppliers and local economies. Last year we spent approximately £148.5m on conservation activity. We have already had to reduce our planned expenditure for this year significantly, as have other heritage organisations, large and small. This means that the supply side of the sector – from stonemasons to thatchers to conservation architects and archaeologists – are struggling to keep their businesses afloat. There is a real risk that core heritage skills could be lost forever, particularly traditional craft skills, which will have a significant long-term impact on the sector.
- All of this presents a significant challenge when considering what will be needed to deliver a truly forward-looking post-coronavirus recovery. Decisions taken now will have a long-term impact on the nation we become. We agree with the Business Secretary’s recent comment that “every country around the world will face a choice, between laying the foundations for sound, sustainable growth or locking in polluting emissions for decades.” We need to avoid thoughtless wholescale deregulation and seek spending that has a dividend for nature and reduces carbon emissions, and which boosts public health through clean air and nature recovery.
- The heritage and tourism sectors have much to offer in terms of supporting a green recovery. Repairing, re-using, and retrofitting in a way that respects historic buildings and enhances their heritage value should be a key part of any green recovery, and the Government needs to look at fiscal measures to support this, including looking at VAT on repair and maintenance, which currently disincentivises this approach. It would also be helpful to review the Tourism Sector Deal given the huge impact that the coronavirus has had on organisations and individuals in the sector. As with other sectors, sustainability needs to be at the heart of recovery, and this is an opportunity to ensure that the future of our tourism industry is not only secured, but that it actively contributes to our wider green recovery.
- The social, cultural and environmental values of our historic parks and natural urban green heritage has clearly been proved in recent weeks. Investment in our cultural and natural heritage will not only create jobs and put us on the road to addressing the profound challenges facing us as a result of climate change, but respond to what the lockdown has clearly shown: that people want and need access to high quality nature-rich green space near where they live. Many living in urban areas have been hit by the poor provision of green space on their doorsteps, following years of loss and sale of public spaces and playing fields. This particularly impacts those who are unable to get outside as often, are living in smaller, more cramped spaces and who don’t have access to their own gardens. Planting trees to become new woods and forests, and the creation of new corridors of green space that helps bring nature into the built environment and link towns and cities with countryside would make a real difference to people’s quality life, and offer a lasting, physical legacy to help the nation commemorate and recover from this devastating pandemic. We want to work with the Government to help make this a reality.
Current and future support needs for our sectors
Existing coronavirus support schemes
- We were pleased that the UK Government has made some additional support available to charities providing front-line services, but it’s worth noting that this funding will do little to support charities in our sectors. These organisations may not be offering the emergency support to people right now that is so important, but they will be crucial to the longer-term health and wellbeing of the nation. We therefore support wider sector calls for further measures to protect charities’ liquidity in order to secure the long-term future of the sector, which could include further grants aimed at promoting third sector resilience, or further targeted reliefs, such as by prepaying gift aid based on last year's levels as a cash boost and guaranteed income.
- The Government’s Coronavirus Job Retention scheme is extremely welcome, and the Trust has been able to take advantage of it. But it does not support the tourism, museums, heritage, environment and broader charity sectors as effectively as other sectors. The all or nothing approach offered by the scheme does not allow for occasional or urgent tasks to be undertaken by staff who are otherwise facing a significantly reduced workload – even in a voluntary capacity. Whilst properties and reserves may be closed to the public, essential conservation needs to continue across all sites; a common challenge to all in the heritage and conservation sectors (and one the Government has already recognised as being a problem when it comes to animal welfare in zoos). As we move towards the next stage of lockdown greater flexibility would be extremely valuable, particularly to help ensure that sites can accommodate the social distancing measures that will still need to be in place when the lockdown starts to lift, and work can be done on site in preparation.
- Re-opening our sites is likely to be a phased process, and we don’t expect to return to full re-opening of all our places and full offer immediately. It’s also likely that the public confidence in the safety of visiting our places will take time to restore – for example, recent polling by ALVA found that 21% of people would not feel comfortable taking a day out to a visitor attraction until a treatment or vaccine is available. There appears to be notably more anxiety in people’s minds about visiting indoor spaces, which will particularly impact on museums and indoor attractions (including historic houses and mansions).
- We also work with a significant number of volunteers (over 55,000) who help support our places, including our visitor offer. Almost 13,500 of our volunteers are over 70, and while it’s unclear at present what the impact of coronavirus will be on our volunteers, many will be shielding or in higher-risk categories, and so it’s likely that there will be some impact on the number of people who are able to support our work on site.
- We will therefore still face limitations on our ability to generate income when we do start to reopen our places and it will be essential that government support, including the furlough scheme, remains in force until such time as our sites can be are fully operational. A follow-on “return to work” scheme which allowed some level of continued support for the payment of salaries while operations are resuming and as furloughed staff return would be extremely welcome, and we support the proposals being made by Wildlife and Countryside Link on this. However, it will also be extremely important that the existing furlough scheme is kept available for as long as possible to help keep minimise running costs from those staff who are not immediately needed, and until such time as our sites can be fully operational.
- We will need support to reopen our sites safely for both people and for nature when the lockdown ends. There will be challenges in making sure our places are ready, and that the wider tourism infrastructure is able to support visitors too, e.g. in terms of public transport and other local services. It would be helpful for governments across the UK to work together and to co-ordinate across government department and agencies to ensure a well-managed, controlled lifting of lockdown restrictions and reopening of sites – from countryside, gardens and parkland to museums and historic houses, which all face varying challenges and limitations.
Grants and funding
- We welcome the fact that funders have responded with flexibility towards application deadlines and conditions for grants. However, we think there is more that could be done by them to help mitigate the financial impacts of this crisis on our sectors. In particular we would like to see the lottery funds going further in their actions to support the future of their sectors. The announced £50 million emergency support funding from the National Lottery Heritage Fund will make a significant difference for many organisations, in addition to the £2 million Historic England has made available for grants up to £50,000. But these funds are not sufficient to meet the needs of the sectors they serve. NLHF’s funding will only be available for current grantees and one third of respondents to their survey looking for help were outside that category. There is also little or no support for private sector heritage organisations currently available.
- The emergency funding landscape is complex, with separate processes for the different lottery funds, central government funds and other funders. This is quite onerous and simplification or pooling of funds might potentially make a big difference to organisations having to deal with multiple application processes.
- In the medium to long term accessing funding for ongoing conservation projects is likely to be challenging, as grant funding that would otherwise have been available to support conservation project delivery is being repurposed. For example, the National Lottery Heritage Fund emergency funding has been drawn forward and repurposed from existing money, and relies on a halt in wider funding until at least October.
- It is important that DCMS and MHCLG support local councils through adequate revenue grant to maintain cultural infrastructure in cities. Further bouts of austerity experienced by local councils are likely to lead to the tipping point for regional museums, further hollowing out city and town centres. Parks and green spaces are also at risk, despite the important role that they have played for people during lockdown, with many authorities already having substantially budgets for green space provision over recent years. Our existing Future Parks initiative with the National Lottery Heritage Fund has already been seeking innovative new approaches to making the most of public parks and green space in urban areas; this will be even more important in future. We would like to see more support from Government to maintain these crucial elements of urban infrastructure.
- To address these issues and ensure that quality of place, culture and community are at the heart of a future recovery, a new approach to funding might be needed. Pooling funding to create larger pots of funding and larger grants available, with a range of funders contributing – from the lottery funds to the research councils and income generating tax schemes such as those from Landfill taxes, designated funds, and even sources such as Section 106 payments, might enable a more comprehensive and coherent approach. Government could play an invaluable role in creating a platform to leverage funding schemes together to create opportunities at scale, and through supplementing existing resources with additional funds. There may also be opportunities to explore whether private sector corporate social responsibility funds could contribute to these wider pools of funding. This could go a long way in helping ensure the longer-term sustainability of our sectors, as well as putting in place a funding mechanism for organisations to undertake work to contribute towards longer term economic recovery - boosting buildings conservation activity, preserving and expanding existing jobs and skills, and helping to create the new jobs that will be required for a green economy.
- We should be putting renewed effort into culture and heritage as focal points for regeneration and social cohesion. We have an opportunity to ensure mechanisms like UK Shared Prosperity Fund, Heritage Action Zones, Towns Fund, and the Historic High Streets Fund all work together to put wellbeing, social connection and quality of place at the heart of recovery for those towns and cities that have been worst affected by coronavirus.
- In light of the current situation, the UK Shared Prosperity Fund in particular will play an ever more important role in the longer-term funding landscape for rural heritage, tourism and agricultural businesses. We would like to see more detail on how this fund will be applied and administered as a matter of urgency in order to allow organisations to plan ahead. The public money for public goods approach of the new environmental land management schemes being developed to replace existing CAP payments for farmers will also be vital in securing the future of much rural heritage; from rural farm buildings and iconic drystone walls to the 75% of scheduled ancient monuments which are within agricultural holdings.
What lessons can be learnt from how DCMS, arms-length bodies and the sector have dealt with Covid-19?
- The current situation has shone a light on the precarious nature of much of the charity sector. Many organisations have been operating with little to no financial flexibility, and some of the hardest hit have been those that have put the most effort into developing income streams through visitor and trading income. Some that have worked to reduce their reliance on grant funding now find that they do not quality for emergency support, despite having lost the vast majority of their income during this period. Yet these are organisations looking after some of our most precious and important historic and natural assets, which bring huge value to people and communities in direct and indirect ways. It is also these organisations that the Government looks to in terms of delivering on much of its ambition for the environment and to drive the tourism sector which contributes nearly 10% of the UK’s GDP. The public benefit generated by the charity sector is highly significant, but it can only be delivered if the charity sector has access to sufficient long-term funding that supports their organisational resilience as well as service delivery.
- The degree of fragmentation in terms of how government and funders have approached support for different sectors during this period has been particularly noticeable. The heritage, tourism, environment, museums, and arts and cultural sectors have largely been engaged with and treated separately – despite often facing similar challenges, holding similar concerns and individual organisations often cutting across multiple sectors (we are a particularly broad example of that, having an interest in all of these sectors). Greater join up both within government and across ALBs and funders could enable more comprehensive and innovative ways of identifying and addressing the challenges faced by these sectors and improving support and funding responses.
- On a more positive note, this crisis has shown the real value to the public of access to green space and nature, and to culture and collections as people have sought to find ways to stay active, entertained and continue learning and exploring even while locked down in their homes. We and others in our sectors have been creating new, innovative digital offers for our members and the public during this period, and some existing content is reaching new audiences – for example we’ve seen a six-fold increase in downloads of our podcasts. We are therefore discovering new ways of interacting and engaging the public, and providing new forms of access to our places and collections which may well support efforts to widen participation and access in the future, even after the current crisis ends.