A man at a networking breakfast asked me this this morning - the average viewer of Time Team doesn't always ask this question, but it's a matter of keen interest to archaeologists, especially freelance ones.
I explained that it depended on the job: in extreme cases some of it was publicly funded, through large public bodies like English Heritage, that there was charitable funding - indirectly through the Heritage Lottery fund - which can be used for certain special projects, such as recording the worked stone collection at Torre Abbey which Mark was working on last year. Thanks to statutory requirements (PPS5), developers have to pay for archaeology - where it is likely to be found. Before the statutory requirements, there was rather less archaeology!
Not all developers are giant publicly quoted companies dealing with huge sites where a great deal of archaeology may be discovered. A lot of the "developers" are individuals who own listed properties - and they often find it surprising that they are expected to pay an archaeologist to record their property before they insert a new bathroom, extend their kitchen or put a swimming pool "within the curtilage" of their listed property.
I have some sympathy for owners of listed properties: I was brought up in one - pre-refurbishment, and a very glorious chilly heritage experience it was too. My father - something of a dinosaur perhaps - had a rather mixed view of his duties as the owner as part of Britain's heritage. He felt firstly that it was his house - and no one could tell him what to do with it. An understandable view but when it was pointed out that he was the guardian of a valuable bit of heritage (a farmhouse, cut down from a manor house - a royal manor in the 14thC) he then began to wonder why the Government weren't paying him to look after it, and keep it up. Dream on!
Not surprisingly perhaps, he had a less than compliant view of planning permission, preferring to acquire it retrospectively - sharp intakes of breath all round! I think the only archaeologist who ever saw the house was Mark - on social visits. No doubt all over the country bits of sneaky refurbishment are taking place - without records being made of the changes being made. Some of these things seem small and insignificant to house owners - what does it matter? But there is much to learn about building techniques and styles, especially specific local techniques - which can be of use where people want to conserve their property authentically. There are things that seem meaningless now - which may in future provide good evidence for something we haven't even considered today.
Attitudes change - lathe and plaster used to be thought awfully primitive - until its insulating properties were recognised and appreciated. The reason my parents' house was so cold was because some revolutionary had stripped off the lathe and plaster and improved it with brick - a wall one brick thick is rather less snug than lathe and plaster - so that's a technology well worth considering as the energy prices rise.
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