Art of balancing the books: when local council fundraising starts to resemble selling off the family silver

The auctioning off of a valuable Millais painting raises some ethical questions. By Rob Sharp

A 19th-century painting of a partially clothed sleepwalker by pre-eminent English painter Sir John Everett Millais was sold at auction in London yesterday for £74,000.

And while its cash-strapped owner – Bolton City Council – pockets the funds, the painting has been bought by a private US collector, so is unlikely to be seen in this country again. The local authority, 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, with the etching selling for £5,400 and the £10,000 lithograph failing to sell.

In total 36 artworks, estimated to be worth around £225,000, are being sold by the council, in order to fund 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. "We hope that the sale of the selected works of art will enable us to create a new and modern storage facility which will help to suitably maintain the remainder of our art stock," said Bolton councillor Elaine Sherrington.

But it isn't the only area to adopt a sell-off strategy to raise funds. At auctions last November and in February, Leicestershire City Council sold 124 artworks to raise £150,000 for arts and heritage.

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 set to unveil a report next week which will outline the full extent of local authority budget cuts on local 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, Bolton has sold works by Picasso and 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 Museums Association guidelines, which stipulate that monies raised must be used to improve its overall collection. However the Association has no statutory power. In 2006, Bury Council raised £1.4m by selling LS 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".

Indeed, many observers believe that current guidelines are not stringent enough. "We've long been concerned that the Museum Association guidelines on selling art are open to too much interpretation and that Councils looking to fund other services might try their luck," said Art Fund director Stephen Deuchar. "Bolton Council has done just that – and it could set a dangerous precedent. It would be much clearer if the use of funds from the sale of art was restricted to buying new art, or to upgrading the collection which would stop local authorities eyeing up the family silver," he said. David Lee, editor of art magazine Jackdaw, told the BBC that art should be shared between institutions and should not be used to replace funds which have been lost elsewhere.

"The future is bleak, because eventually museums will be doing what museums do in America, which is selling stuff wholesale," he said. "I'm absolutely certain... I think local councillors are going to start asking museums to justify huge tranches of public money being spent on facilities which few people are interested in."