Jon WelchMuseums are facing a potential funding shortage as cash-strapped local authorities tighten their belts and lottery funding is diverted to the London 2012 Olympics, it has been warned.Jon Welch

Museums are facing a potential funding shortage as cash-strapped local authorities tighten their belts and lottery funding is diverted to the London 2012 Olympics, it has been warned.

Mark Taylor, director of the Museums Association, said many would have to put refurbishment or development plans on hold because of forthcoming cuts in public spending.

He said they were already suffering from a reduction in lottery grants and were braced for cuts in funding from local and national government from April 2011.

The Heritage Lottery Fund (HLF) has reduced its annual grants by about 40pc from last year due to legislative changes, a cut in interest rates and the diversion of �161.2m between 2008/09 and 2012/13 towards the Olympics.

Mr Taylor said: 'It's absolutely inevitable that culture and museums are going to suffer. For the next 18 months it's a question of getting ready for it: trimming here and cutting there. In the longer term it may be more seismic.

'Less HLF money will not result in museum closures, but it will mean some very worthwhile buildings and projects that people want to do will not happen. It does come down to a reduced service to the public.'

Charles Wilde, of Norfolk Museums and Archaeology Service, said the organisation had raised more than �30m from external sources over the past decade, about two-thirds of it from HLF.

'This investment has been crucial to NMAS being able to redevelop Norwich Castle, Gressenhall Farm and Workhouse, the Lynn Museum, Cromer Museum, Ancient House Museum in Thetford and develop the new Time & Tide museum in Yarmouth,' he said.

'We've been aware for some time that the amount of money HLF have available is decreasing, but nonetheless HLF still distribute considerable funds and will continue to be a significant partner for NMAS.

'HLF have invested almost �1m of grant aid into the current redevelopment of the Bridewell Museum in Norwich and they are the principal funders of the Great British Art Debate, which will result in five major art exhibitions coming to Norwich Castle, so people in Norfolk will be benefiting from Heritage Lottery funding for many years to come.'

He said the service was prepared for a cut in income and would look to other organisations for funding, but that most of its major refurbishment work had already been done.

The HLF is spreading the diversion of money for the Olympics over 10 years to lessen the impact on applicants and hopes the sale of land in East London following the Games will help to further soften the blow.

In the last 15 years, HLF has given �73.8m to museums and galleries in the East of England, including �2.6 million in 2001 towards the new Time and Tide Museum in Great Yarmouth, �778,000 to Lynn Museum and �998,000 to Norwich's Bridewell Museum.

'Our investment has not only revitalised museums, parks, historic buildings, landscapes and wildlife sites, but has also given new meaning to heritage itself by preserving stories, cultural traditions and by getting more people directly involved,' it said in a statement.

'In 2008/09 we awarded �10m to 167 projects across the East of England and anticipate that this will remain at the same level for the coming financial year. We do not ring-fence money for specific sectors and so we are unable to predict how much of this allocation will be made to the museums and gallery sector in the coming year.'