Interior view of Victoria and Albert Museum — Photography : Kiev.Victor / Shutterstock

The Victoria and Albert Museum (V&A) charity has faced a significant financial setback, with its latest annual report and accounts revealing a £10 million drop in income. The decline in income is primarily attributed to a reduction in central government funding, a trend that has been affecting many cultural institutions across the United Kingdom.

Despite the first full year of operation at its main South Kensington site since 2018-19, the V&A charity’s income declined from £131.7 million to £121.4 million for the year ending March 2023. In 2021-22, the charity received £20.1 million from the Department for Culture, Media, and Sport (DCMS) for capital works, but this funding was reduced to £9.24 million in 2022-23.

One of the challenges highlighted in the accounts is the slow recovery of visitor numbers compared to pre-pandemic levels. While there was a 69% growth in visitor numbers over the previous year, they only reached approximately 75% of the levels seen before the pandemic. This reflects the broader struggles of the cultural sector, especially in terms of international tourism.

Visitor behavior continued to be affected by the ongoing pandemic, and the rising cost of living added another layer of complexity. Maintaining and growing the V&A’s membership scheme proved to be a particular challenge in this environment.

The charity’s income primarily came from DCMS, amounting to £67.5 million, a decrease from the previous year’s £78.3 million. Donations and legacies did see a slight increase from £14.5 million to £14.8 million during the same period.

While there was a partial recovery in visitor numbers during 2022-23, the slow recovery of inbound tourism and lower footfall raised concerns about the potential impact on commercial income.

Inflationary pressures were also identified as an operational and financial risk, affecting both the supply chain and the labor market. These pressures continue to pose a threat to the financial sustainability and operational effectiveness of the V&A.

The V&A did experience positive growth in retail sales, with gross sales reaching £11.3 million (including £10.1 million through physical shops and £1.3 million online), up by 57% compared to the previous year. The main shop particularly stood out with total sales of £8.7 million, marking the highest-ever performance for that space.

Despite having funds totaling £818.2 million at the end of March 2023, the trustees only had access to a combined total of £53.5 million from certain general and designated funds. This amount was a slight increase from the previous year’s £46.1 million.

The accounts also addressed the impact of inflation on operating budgets, capital programs, and staff turnover. Higher staff turnover was observed due to the challenges posed by inflation.

Efforts to expand volunteering opportunities were mentioned, with the charity appointing its first head of volunteering. They worked with volunteers, volunteer managers, and potential volunteers to create new opportunities.

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