The Cabinet has decided to approve the submission of a Development Phase application to NLHF for the redevelopment of the City Museum, despite some financial risks and differing opinions on funding sources.

URL: https://committeeadmin.lancaster.gov.uk/ieDecisionDetails.aspx?ID=1631

Decision Maker: Cabinet

Outcome: Recommendations Approved

Is Key Decision?: Yes

Is Callable In?: No

Purpose: Following a full Review of the Lancaster City Museums in 2024, Cabinet agreed in 2025 to prioritise the redevelopment of the City Museum to improve the displays, public facilities and the condition of the building. The aim is to complete this work by 2033 for the 250th anniversary of the building. This requires two grant applications, a Development and then a Delivery Phase. In order to progress the grant application to National Lottery Heritage Fund for the Development Phase, support is required for: •Use of Reserves to supply match-funding for the 2-year Development Phase grant •Approval to accept a Development Phase grant should the application be successful

Content: (Cabinet Member with Special Responsibility Councillor Riches)   Cabinet received a report from the Chief Officer Sustainable Growth that sought support for the city museum development project.  The Chair advised the meeting that whilst the report was public the appendices were exempt and that the press and public would need to be excluded if Cabinet wished to discuss any information contained within the exempt appendices.   The options, options analysis, including risk assessment and officer preferred option, were set out in the report as follows:     Option 1 Do nothing Option2: Concentrate on revamping the museum displays and accessibility Option 3: Support the application to NLHF to redevelop the City Museum Advantages Reduced immediate financial risk Reduced officer capacity required Public facing offer will be increased with benefits for residents and high street Public facing offer will be transformed with benefits for residents, visitor economy and high street. Community benefits will be realised Museum net income will rise to over £0.120M £0.140M p.a. from £0.042M supporting increased opening hours and days, repayment of borrowing and additional staffing to help deliver an improved service to residents as well as improved collections access and care. Wider economic impact of £2.0M p.a. alongside £1.6M adult productivity benefits to health Long-term liabilities on the building will be significantly reduced alongside additional infrastructure improvements. Additional energy efficiency work will reduce energy costs Accessibility will be significantly improved. Disadvantages City Museum building and museum continue to decline and remain inaccessible to many with disabilities. Reduced visitors will result in reduced income and reduced wider economic benefit. Some of the work that is required to deliver this will involve significant infrastructure work It will not address many of the infrastructure issues with the building City Museum would need to be partially closed/closed for around a year while the work was on-going. Community benefits will not be realised Council will need to underwrite the match funding City Museum will need to be closed for around 1.5-2 years with consequent loss of wider resident and economic benefits and loss of income during the closure period (a service will continue to be provided through a ‘pop-up’ museum offer throughout the district) Risks • Some immediate financial risk due to lack of building maintenance and unknown issues e.g. dry rot • Long-term financial risk of £2.212M from a 10 year liability to the building from recent condition and M&E surveys and infrastructure ‘end of life’ • Long-term risk to the city museums and the museum collections, with consequent risk to benefits for local residents and the visitor economy • QS advice is that if we don’t address the fundamental infrastructure issues e.g. re-wiring, heating system, alarms, data connections it will mean disruptive and more costly work later on e.g. if the re-wiring is not fully done then the new displays would have to be taken out in order for a full re-wire to take place at end of life – current wiring system 40+ years old. • The installation of the accessibility features, such as a lift and public toilets will significantly impinge on staff areas, which will have a ‘knock on’ effect that will also need resolving. The wiring in this part of the building is old with highly outdated distribution boards. • Without additional funding (which will also require match-funding) this will not be achievable. As well as capital costs for accessibility work and the displays, that funding will also need to include significant costs for project staff and activity to allow staff capacity to deliver. • The business plan is less likely to deliver significant income improvements • Fundraising for £800k is not achieved (there is mitigation in terms of budget for contracting a fundraising professional during the Development Phase, when the fundraising will largely take place, so the situation with regard to the funding situation will be better known at the point of application for the Delivery Phase) • The £0.211M of capital funding includes a new boiler in 2034/5 at the end of the programme. This is not one of the infrastructure elements that is included in the costs from the condition and M&E survey, however the programme needs to be re considered anyway at budget setting for 2027/8 in light of the further condition survey work. • The museum business plan does not deliver the expected benefits in terms of opening hours, additional staffing and repayment of the loan (this has been mitigated with a robust business plan). • £0.166M of reserves would be used to progress the Development Phase. • Costs will increase (this is being mitigated in the Development Phase by taking the project almost to RIBA 4 – which may be able to identify some contingency savings – and also by the surveys that have been undertaken in the application preparation).     The officer preferred option is option 3, which is the most long-term cost-effective option for the building over a 10-30 year period. From this perspective it delivers over £2M of benefits in the 10-year building maintenance requirements for the city museum, as well as delivering almost £2M of additional benefits in terms of improved infrastructure, energy efficiency work that will decrease energy costs and reduce maintenance bills, as well as making the building accessible with a lift and public toilets for the first time. The under-writing of the match funding of £1.3M is a worst-case scenario that is unlikely to occur, the business plan has been robustly developed with benchmarking against other services and staffing savings costs can be re-allocated to this, rather than additional staffing if necessary. The allocation of £0.025M to employ a fundraising professional during the Development Phase should enable some, if not all, of the £0.811M match-funding target to be achieved. £0.025M £0.030M is the recommended allowance for a fundraising professional to be employed for a fundraising ask of up to £1M.   This is also the option that will bring the greatest benefits to local residents across the whole district, supporting a sense of identity and community through delivering a sense of place and belonging at a time when a shared sense of community and identity may well be challenged as the district becomes part of a wider authority, as well as encouraging skills development and lifelong learning. It has responded to the consultation feedback by improving accessibility, extending opening times, creating a flexible community space and prioritising local heritage. The new displays will better tell the story of the whole district, giving a voice to currently underrepresented stories and communities, while new staff will improve public engagement with heritage and the collections across the district and beyond as well as supporting schools, the College and both Lancaster University and the University of Cumbria through student placement opportunities and skills development.   Option 3 will also better support the visitor economy, providing around £2M of wider economic benefit each year, while supporting the high street as it changes from a largely retail-driven offer to a more mixed economy. Cultural anchor organisations such as the City Museum, located centrally on Market Square, are not limited to bringing footfall into the city centre. The redeveloped City Museum, both through visitor information, but also through displays, will act as an orientation point for visitors and locals alike, helping to promote local heritage and cultural organisations and events. A redeveloped City Museum would help to rejuvenate Market Square, and has the potential to help reduce, through partnership working, the anti-social behaviour that currently takes place.   Councillor Riches proposed, seconded by Councillor Hamilton-Cox:   “That the recommendations, as set out in the report, be approved:   During the debate Councillor Tyldesley expressed her support for the project but advised that she would be abstaining since she was a Quaker and disagreed with the national lottery.   Councillors then voted:-   Resolved:   (7 Members (Councillors Bannon, Bottoms, Hamilton-Cox, Hart, Peter Jackson, Riches and Stubbins) voted in favour, and 1 Member  (Councillor Tyldesley ) abstained.)     (1)           That approval be given to the submission of a Development Phase application to National Lottery Heritage Fund (NLHF) to redevelop the City Museum and the acceptance of the NLHF grant for the development phase should the application be successful.   (2)           That approval be given to the use of £0.166M from Reserves as match-funding should the Development Phase application be successful.   (3)           That Cabinet agree to the longer-term financial principles of the overall project contained in paragraph 2.3 of the report noting that at this stage it is only an in-principle position and any final decision will be at the point of approvals relating to the delivery phase   (4)           That delegated approval be given to the Chief Officer Sustainable Growth in consultation with the Cabinet Member for Climate Action and Museums to undertake minor alterations to and submit the final content of the Development Phase application to NLHF.   Officers responsible for effecting the decision:   Chief Officer Sustainable Growth   Reasons for making the decision:   The City Museum is housed within one of Lancaster’s iconic buildings and there has been a centre for the community on this site for over 500 years. This project provides the opportunity for the building and the museum within it to once again be made ‘Fit for the Future’. At the end of the project the Council will have leveraged in an estimated £5.8M in grant aid and the building will be accessible and in a good state of repair, the displays will have been transformed and will once again inform, delight and entertain, while providing visitors and local residents with a strong sense of the heritage and identity that Lancaster and its surrounding district contains. The Lancaster district is, in essence, the old Hundred of Lonsdale (South of the Sands) and as such has existed as a discrete entity for over 900 years. This is about to change, but the identity of the area, centred upon Morecambe Bay and the Lune, Keer and Cocker river valleys and overlooked by the massive Iron Age mountain fort of Ingleborough, will remain.   The decision is consistent with the Council Plan:   The redevelopment of the City Museum and consequent increase in sustainability for the City Museum(s) is a priority in the 2026-8 Council Plan and supports the Council Plan in three main ways 3.3 Access to Culture & Leisure – project ‘Developing a vision and action plan for the City Museums’ 4.1 Value for money – part of the Fit for the Future/OBR project 2.4 Investment & Regeneration The project also supports the Council’s Culture & Heritage Vision, the draft Arts & Culture Strategy and the draft Lancaster City Centre Strategy.

Date of Decision: July 7, 2026