I send you herewith a copy of the Welsh Office letter of 28 November 1997, as requested during the Hearing of your Committee on Monday afternoon (Annex). This makes very clear what our sale price was, and what limitations there are on the way that we can use the moneys.

  Though I realise it is too late to put into the record of the meeting on the day, I do want to reiterate that it is the Council of the National Museums and Galleries of Wales which is our executive body, and that all decisions on the Welsh Industrial and Maritime Museum were taken by Council: there are minuted resolutions on every step we took. The Court, to which you referred in your closing statement, is a purely advisory body, which has hitherto met once a year but will now meet twice a year (alternately in north and south Wales).

Colin Ford
Director

28 October 1998

  The purpose of this letter is to set out the financial arrangements which have been agreed to enable the National Museums and Galleries of Wales (NMGW) to close the Welsh Industrial and Maritime Museum (WIMM), to release the site to the Cardiff Bay Development Corporation (CBDC) for redevelopment and to enable a replacement museum to be provided.

  The sum of money which CBDC has offered to pay to the NMGW is £7.5 million. This is to be made available in 2 parts:

(i)  CBDC will pay £4.5 million to NMGW as direct compensation for the WIMM.

(ii)  CBDC's grant in aid will be reduced by £3 million and the NMGW will receive a corresponding increase in grant in aid provision.

  The £7.5 million to be paid to the NMGW will be ring-fenced by the Welsh Office, with the intention of ensuring that it will be spent only on the transfer, storage and reinstallation of the NMGW's collection, currently held at the WIMM and associated storage areas, and on the re-display of these exhibits at a replacement museum (or museums).

  Subject to Parliamentary approval, £0.6 million will be made available to NMGW for the immediate removal and storage of WIMM exhibits during 1997-98. The phasing of payments thereafter will be dependent on the NMGW satisfying the Department on its need for those resources in any particular financial year.

  You are aware that the authority for the NMGW to spend compensation payments arising from the disposal of WIMM (ie the £4.5 million), as an asset originally purchased out of public funds, is subject to Parliamentary approval. The Department is content, and has the necessary authority, to seek that approval at the appropriate time. You are also aware of the need to avoid having to carry funds over from one year to the next beyond the approved limits.

  The NMGW must not make any public announcements which appear to pre-empt Parliamentary approval. All press releases or other public statements on the issue must be cleared with the Department.

  I am copying this letter to Michael Boyce at CBDC.

D. R. Thomas
Welsh Office

28 November 1997