'Critically underfunded' charity museum trust calls for bail-out

Museums Sheffield, which also suffered financial problems in 2008, has approached Sheffield Council for more money to stave off a "serious cash flow problem".

Yesterday chief executive Nick Dodd admitted negotiations were ongoing with the council, but he could not discuss the figures involved until an agreement was reached.

Museums Sheffield was set up around a decade ago by Sheffield Council as an independent charity to run the city's Millennium Galleries and Weston Park Museum.

It also runs the Graves Gallery and Bishop's House Museum and receives a budget from the council each year, which was cut by five per cent in March.

At that time, the organisation's 100 staff took a voluntary pay cut of 2.5 per cent, but Mr Dodd said he and his team were still facing a fight to stay afloat financially.

He added: "A recent independent financial review concluded that Museums Sheffield is operating efficiently but is critically underfunded for the service it provides.

"The review recognised that Museums Sheffield needs a significant cash injection to re-capitalise the charity and solve the cash flow problems which are limiting its business capabilities."

Sheffield Council leader Paul Scriven said the authority had approved financial help and would be working to develop long-term proposals to avoid similar problems in the future.

In July 2008, it emerged that Museums Sheffield was unable to pay debts from a multi-million refurbishment of the Weston Park Museum. Since then the trust has lost several staff and also imposed a recruitment freeze.