Why Britain could not afford to save its Bacon

Paintings by artists including Jan Steen and Francis Bacon and objects such as a Mughal ceremonial dagger which belonged to Clive of India were among treasures lost to the nation last year despite recommendations they should be saved.

Out of 25 objects of outstanding significance put under temporary export bans, museums and galleries found the funds to buy only nine which would otherwise have gone overseas.

The saved items were worth £5.6m - but, by value, this was just 12 per cent of the £46.4m total worth. Works such as the £9.5m Study After Velasquez by Bacon proved too expensive for any British gallery. The Steen painting now hangs in an Amsterdam gallery. Other items lost this year include 19 watercolours by William Blake entitled Blair's Grave, and Portrait of a Man in Black Cap by Hans Memling, which was bought by a collector in Liechtenstein.

In its annual report to the Government, published yesterday, the Reviewing Committee on the Export of Works of Art, a body of specialists who advise on whether items are of importance, warned it was very "anxious" about how many significant works of art were being lost. It called for greater efforts to be made to keep them.

The National Art Collections Fund charity, which provided £1m of the £5.6m, claimed the situation was at crisis point. David Barrie, its director, said: "The reality is that things just go from bad to worse. This is as bad as it has ever been.

"These figures underline the pressing need to reverse the disastrous decline in the purchasing power of our museums and galleries. The long-term chronic decline in funding means collecting is ceasing to be possible."

It was possible to save modestly priced items but very difficult to secure any work requiring larger sums of money, he said.

The situation has been made worse because the reduction in the amounts of money museums and galleries have for acquisitions has come at a time of high inflation in the art market.

Mr Barrie said it was very unfortunate that the Chancellor, Gordon Brown, had rejected pleas for a tax break to encourage the gift of important works of art to museums and galleries.

"The Chancellor decided the film industry needed a tax break instead. I'm not saying films aren't terrific but museums and galleries are getting to crisis point over building their collections. There seems to be no serious acknowledgement from Government that collecting is at the heart of what museums and galleries are about. They live and die by the objects they collect."

In more measured tones, the export-reviewing committee echoed these concerns and highlighted other problems over funding.

It said the Heritage Lottery Fund, which the Government believes should be the principal source of money for acquiring objects of cultural importance, worked under rules which seemed to defeat its ability to save such items. And the National Heritage Memorial Fund, the fund of last resort, did not have enough money. Although the annual allocation of the NHMF is due to rise from £5m to £10m by 2007-08, the Heritage Lottery Fund will be distributing about 40 per cent less than now by 2008.

The committee suggested there should be a separate national acquisitions fund. Tessa Jowell, the Culture Secretary, said she would consider the idea but praised the successful saving of the nine items. They include the Macclesfield Psalter, The Archers by Sir Joshua Reynolds, an embroidered linen doublet and a cast-iron fire basket.