The provision for the Government indemnity scheme is made by the National Heritage Act 1980. The scheme facilitates public access to loans of works of art and other objects for public display made to museums, galleries and other such institutions by private owners and non-national institutions. It does this by indemnifying lenders against loss or damage to their loan. Loans covered by the scheme must be for public benefit. The scheme also covers loans of such objects for study purposes within borrowing institutions where this would contribute materially to the public's understanding or appreciation of the loan. Examples of this are enhancing interpretation or explanation to the public of objects or bringing into the public domain, the conclusions of any study.

In the six month period ended 30 September 2006, a total of 1,374 undertakings were given to indemnify objects on loan to national and non-national institutions under section 16 by the relevant Departments. The Museums, Libraries and Archives Council (MLA), which manages the scheme on behalf of the Department for Culture, Media and Sport, issued a total of 1,129 undertakings to national museums and 218 undertakings to non-national museums in England, the Scottish Executive Education Department issued six undertakings and the National Assembly for Wales issued two. Finally, the Government Art Collection issued 19 in the same period.

The value of contingent liabilities in respect of undertakings given at any time under section 16 and which remained outstanding as at 30 September 2006 for national museums are £2,634,357,427 and are £1,291,128,448 for non-nationals in England. The value of section 16 contingent liabilities as at 30 September 2006 for the Scottish Executive Education Department are £23,322,208; £33,409,197 for the National Assembly for Wales, and £2,531,500 for the Government Art Collection.

The value of non-statutory undertakings given to Her Majesty in respect of loans from the Royal Collection and which remained outstanding as at 30 September 2006 are £588,211,857; £36,821,000 for non-national museums issued by the MLA, £25,000 for the Government art collections and £15,000 for the Scottish Executive Education Department.