Art of balancing budgets: cash-strapped councils clear out their collections

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A painting owned by Bolton Council, depicting a partly clothed sleepwalker, sold at a London auction yesterday for £74,000. While the cash-strapped local authority pockets the funds, the painting – by the 19th-century English artist Sir John Everett Millais – has been bought by a private American collector, and is unlikely to be seen in this country again.

The council, which bought the Millais for £400 at an auction in 1969, also attempted to dispose of an etching, La Suite Vollard, and lithograph, Le Picador, by Pablo Picasso earlier this week; the etching went for £5,400 but the £10,000 lithograph failed to sell. A total of 36 artworks, estimated to be worth around £225,000, are being sold by the council to pay for a new storage block at the city's museum. Bolton is struggling to cope with a £60m cut to its budget over the next two years.

The council isn't the only one to have sold off its artistic assets to raise funds. Last November and in February, Leicestershire Council auctioned 124 artworks, raising £150,000 to plough back into its arts and heritage provision.

The Museums Association, which provides advice to local authorities on museum collections, has said it has recently been approached by at least one other council about a major art disposal, prompting fears that other councils may soon dispose of key works.

The Museums Association is to unveil a report next week which will outline the full extent of local authority budget cuts on museums nationwide. The report will explain that 36 per cent of local authority museums are reducing their opening hours because of a slash in government funding, and that charges for school trips have also increased significantly over the past year.

Along with the Millais and the Picasso, Bolton has sold works by the portrait painter George Romney, whose muse was Nelson's mistress Emma Hamilton. Last week, it sold its first batch of 11 paintings, netting £35,000. It claims that none of the works is part of its "core collection", and that it is adhering to guidelines from the Museums Association which stipulate that money raised must be used to improve councils' overall collections.

However, the Association has no statutory power. In 2006, Bury Council raised £1.4m by selling L S Lowry's A Riverbank to make up for a budget shortfall. It was thrown out of the Museums Association as a result but nothing further could be done. The council's leader at the time, Wayne Campbell, said the authority was anxious that "people come before a picture".

Civic art treasures

Southampton City Council

Crouching Woman by Auguste Rodin

Last year the council reversed a decision to sell off key works from its art collection, including sculptures Eve and Crouching Woman by Auguste Rodin, to finance a property development.

Canterbury City Council

Portrait of Sir Basil Dixwell by Sir Anthony Van Dyck

At £1m this was a surprise purchase for the museum, even in 2004, when local museums were already feeling the pinch. Sir Basil Dixwell lived in the 1600s.

Birmingham City Council

The Last of England by Ford Madox Brown

A jewel of the city's museum, it shows a couple departing for Australia.