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Teaching activity

In the News Teaching Activity – how could funding cuts affect museums ? (Apr 2024)

Elizabeth Veal

25th April 2024

The national museums in Wales have a significant shortfall in funding and may have to shed workers or, in the worst-case scenario, shut altogether.

Wales' national museums are facing substantial job cuts and looming closures amidst a £4.5m funding slash. Jane Richardson, Chief Executive, stresses the challenges that museums must tackle, including high staff costs and the pressing need for funding to address the deteriorating National Museum Cardiff. Despite a recent lottery grant, further cuts could prompt a reassessment of the iconic museum's size and operations. Concerns have also been raised about heritage preservation amid political prioritisation, though museums' positive consumption externalities, like cultural enrichment, remain implicit in discussions. Plans entail charging for special events and adjusting opening times to alleviate financial strains. Will these strategies be enough to save the museums in Wales?

Museum Wales: At least 90 jobs cut and Cardiff building may close - BBC News

1 What are the positive consumption externalities generated by museums?

2 Using an MSB/MSC diagram show how museums may be under consumed in the free market and how this may affect welfare.

3 Using a cost and revenue diagram, show how cutting jobs, charging for special events and adjusting opening times could help reduce the funding shortfall.

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Elizabeth Veal

Liz has taught Economics for over 25 years, including several years as Head of Economics at leading schools.

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