National museums and the ex gratia regime - UK Charities update

The Department for Culture, Media and Sport (DCMS) has announced that the provisions in the Charities Act 2022 on ex gratia payments by charities, would be introduced subject to an exclusion for relevant national museums and galleries.  

On 2 February 2024, the DCMS announced this news in a letter from the Minister for Arts and Heritage (Lord Parkinson of Whitley Bay) to the Chair of the Charity Commission (Orlando Fraser). 

Currently, under section 106 of the Charities Act 2011, charity trustees have the ability to seek authorisation from the Charity Commission (under the supervision of the Attorney General) if they feel compelled by a moral obligation to make a transfer of charity property.  These transfers are known as 'ex gratia payments' and they relate to applications of charity property generally.  Ex-gratia payments are usually made in the context of legacy disputes. 

Under the ex-gratia regime, trustees of a museum are able to return an item in their collection to its country of origin if they feel motivated by moral reasons.  However, most national museums are governed by legislation restricting the disposal of collection objects.  The British Museum Act 1963, for instance, includes a general prohibition at section 3 with only narrow exceptions.  

Trustees of national museums would have been able to rely on sections 15 and 16 of the Charities Act 2022 to override restrictions in their governing documents and authorise smaller ex gratia payments (the latter without the need for Charity Commission consent).  

However, in his letter to the Charity Commission, Lord Parkinson of Whitley Bay writes: 'the potential consequences of these provisions were not make clear by the Law Commission when the Bill was introduced, and were not the subject of Parliamentary scrutiny or debate during the passage of the Bill''.  The Government's view is that ''national museums and galleries should continue to be bound by their governing legislation, precluding them from resolving to restitute objects from their collections other than in the limited and specific circumstances expressly provided for in legislation.'

National museums such as the British Museum have faced many demands over decades for the return of contested objects.  Famously contested objects include the Parthenon Marbles and the Benin Bronzes.  

The DCMS also intends to exclude from the commencement of sections 15 and 16 any ex gratia payment where the recipient is located outside the UK.  This is to ensure that charities continue to apply for Commission approval.

The DCMS has already updated its implementation plan, which confirms its intention to bring sections 15 and 16 of Charities Act 2022 into force later in 2024. 

For further details about the implications for your charity, please get in touch.