Calculating cultural value: Regional museums worth £6.16 per visit

Museums are being advised to ask locals whether the arts deserve funding more than other public services in a bid to prove their value.

Arts Council England (ACE) has released an aggregate economic value for four museums it says "can in principle be transferred to other comparable regional museums in England". By the funder's calculations, a medium-sized regional museum is worth an average of £6.16 to every visitor and £3.25 to non-visitors.

It is recommending institutions use a template survey to help calculate their non-market value. Locals' willingness to pay to access a museum or save it from closure – or how much they would accept in compensation if the institution did close – is used as an economic proxy for its intrinsic worth.

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In one question, the survey asks respondents to pick five public services they think are most deserving of government funding, pitting the arts against healthcare, education, transport, the environment, housing, sports, heritage, international aid, public order and safety, and the economy.

ACE says the question helps people "consider their feelings about public funding for culture in a realistic context".

The survey is part of a broader guide for museums on techniques to quantify their public benefit "and why these should be included in your decision making and business cases," the document reads.

It comes as part of the Culture and Heritage Capital Programme announced by DCMS last week, a years-long research project to better estimate culture's economic value and apply it to funding decisions.

ArtsProfessional will be analysing and sharing findings from the Culture and Heritage Capital Programme reports over the coming weeks. Email [email protected] to share your views.

ACE says the research is nascent and may be expanded and applied more widely in future.

"This is the first iteration of a document to help museums understand the complex work taking place in this field".

Museums that fall within the research's rather narrow remit are encouraged to use the tools for social cost benefit analysis; however, ACE says it does not plan to make this part of any future funding applications.

Transferring the benefits

Museums can calculate their value through 'benefit transfer', applying the average value of similar institutions to their own, ACE says.

The average value of four museums – The Great North Museum in Newcastle, The Ashmolean in Oxford, York's National Railway museum, and The World Museum, Liverpool – was estimated through surveys to be £6.16 for visitors and £3.25 for non-visitors.

That value can then be multiplied by the local population minus an actual or "plausible percentage" of visitors to get a non-market value estimate. Subtracting operational costs from this total provides a social cost benefit analysis, ACE says.

"Assuming that the regional museums are indeed characteristically similar, this procedure should give a more robust and representative estimate of valuations for a regional museum than estimates based on a single site, and is therefore the value we recommend that you should use in your business case."

Museums are advised to undertake their own population surveys, but in lieu of that, ACE says cross referencing its benefit transfer tool with national population data offers certain upsides: it's an easier and cheaper method than doing it yourself, it gives a fuller picture of a museum's economic value than turnover alone, and crucially "provides an advantage in a competitive funding environment, where funders are looking for more robust rationales for using public money to invest in institutions".

But it warns museums against over-attributing their value, saying "exaggerated estimates or making unrealistic assumptions… will deter funders".

"Institutions must be realistic about the reach and impact of their museum."

The accepted margin of error for benefit transfer is surprisingly high: 40%. While margin of error between museums in this research was lower than that, only four sites – the minimum sample size recommended by academics for creating transferrable value – were considered due to budget constraints.

The Manchester Museums Partnership told ArtsProfessional that measuring the value of culture is "highly contested and complex terrain that demands a nuanced approach".

It is able to make market assessments thanks to Manchester City Council, which provides estimates of the gross value added by all the city's cultural institutions.

But this data only reveals part of the picture, the partnership said.

"We work with a host of academics and other partners to find effective ways to articulate our social value across multiple domains, from public health and wellbeing [to] education, research impact and action on biodiversity and zero carbon.

"We continue to closely follow the development of this work and welcome the current DCMS open call for evidence to improve methodologies for valuation."

Cost vs benefit

It's unclear how many museums are eligible to use the benefit transfer tool, which is limited to regional institutions with at least 200,000 visitors in a normal year.

To be an appropriate match, museums must also be based in a major city within their county, welcome at least a quarter of their visitors from out of town, hold collections of broad importance, and be free to enter.

Those which are too dissimilar – local museums, central London museums, museums in seaside towns, museums that lack competition in their area, and museums outside of England – are instead advised to consult an economist or valuation expert to try determine a different approach.

Andrew Lovett, Chief Executive of Black Country Living Museum and Chair of the Association of Independent Museums (AIM), said his museum would probably attempt to use a Government-backed valuation method "down the line".

Having previously supplied value data as part of a funding agreement with its Local Enterprise Partnership, he said funders public and private would always want different types of data to justify their investments: "You get used to it, you get better at it as it goes on… the terminology becomes more understood."

However, Black Country Living Museum was yet to translate its value data into monetary terms as the new guidelines suggest.

"But we certainly always talked about social impact, the importance of changing perceptionsand all those things."

The guidelines seemed comprehensive, but even studies by experts can only provide a best estimate, Lovett said.

"If it's to get traction and start to be used, they [ACE] will probably have to accept that they will have to do some training for it."

The Manchester Museums Partnership agreed: "Economic valuation remains both a resource intensive and specialist form of research."

"It demands both capacity and capability in data collection and analysis that many museums, that, for the most part, do not have specialist staff in-house to call on, may struggle to provide. This coming too at a moment when museum resources have never been more stretched."

"We would welcome the opportunity to continue the conversation with ACE and DCMS on how our sector could effectively deliver this work."

Asked how it planned to support museums to perform these valuations, an ACE spokesperson said: "Our current priority is delivering emergency funding for the sector and helping organisations face challenges posed by the pandemic."

"We think this guidance and research can provide useful self assessment tools for museums as they begin to recover and reopen."