CHARLES HUTCHINSON delves beneath the many surfaces of an exhibition in York that uses objections donated from a lifetime of collecting.

HOW do you judge value? How do you put a price on it?

Oscar Wilde may have calculated in Lady Windermere's Fan that a cynic knows the price of everything and the value of nothing, but a new installation exhibition in York broadens value judgement beyond such cynicism.

In a nutshell, a collector's left-overs from a London auction house sale have been turned into new works by five artists commissioned for their alchemist's touch, and most of the pieces will be for sale with all proceeds going to the York Art Gallery redevelopment fund. Before you say "New money for old tat", here is the more artistic explanation of what's going on.

The Finding The Value installations at York St Mary's bring new life to a lifetime's collection of paintings, prints, books and ethnographic and decorative art given to York Museums Trust alongside two bequests in 2011 by Peter Madsen and his sister Karen Madsen.

Beyond their interest in art and archaeology and Peter's work as a scientist in Oxford, little is known of the Madsens, who retired to York after successful careers, but their £2 million bequest was the catalyst needed to instigate the £8 million development of York Art Gallery for its reopening next summer. Now that is good value.

"We acquired some items for the trust's collection as a permanent record of Mr Madsen’s generosity and the rest was sold at auction to raise funds for York Art Gallery, " says the trust's chief executive, Dr Janet Barnes.

Here is where the issue of value comes under scrutiny.

"The residue that was left from the Bonhams' auction was of much lesser value, so we decided to take these works, both images and objects, as the raw material for new works," says Dr Barnes. "It may even be the case that the financial value of these new works will greatly exceed the present value of the original material.”

In February, artists Andrew Bracey, Alison Erika Forde, Yvette Hawkins, Susie MacMurray and Simon Venus were invited to visit York St Mary's to look through Mr Madsen's works and belongings not sold at auction. Paintings and boxes on trestle tables were lined up in the church building, and each artist found items they considered of value to use anew.

Dominating the floor of St Mary's is Andrew Bracey's ReconFigure Paintings, a white cube space within a large mirrored structure that reflects both the church's architecture and the viewer. Inside the cube hang figurative paintings from the collection, on which the Addington artist has painted abstract structures, each superimposed on a human figure. In doing so, he is challenging you to decide whether he has defaced the paintings or rejuvenated them, improving their value.

Responding to the Madsens' act of giving, Manchester artist Susie MacMurray has made her Legacy artwork from "obscure small items" she has wrapped in gold-plated wire and packed into an old suitcase that belonged to Peter Madsen, displayed with a pair of paintings she has gilded with gold leaf.

Beneath the gleaming new surfaces are original items that emanated a sense of poignancy to Susie.

"These things, amassed through a lifetime, must have had personal significance and had many stories and private memories attached to them, none of which are now available to us," she says.

Memories lost, clutter has turned to glitter.

Whereas Susie covers up, Alison Erika Forde adds her own imprint in storytelling works inspired by a cast of characters she came across in the Madsen collection.

In particular, she was intrigued by a drawing of three blind mice, a pin-cushion doll and a tiny ceramic dog. These characters have been re-imagined in her darkly playful, surrealist compositions and placed with a cabinet and carpet runners in her "imagined version of the space the Madsens might have lived in".

"I prefer working in this way," says the fine art graduate from Wigan, whose works triggers childhood memories. "I find much more inspiration in objects that have history, rather than a blank canvas. I get excited by old bits and bobs and I see myself as collaborating rather than taking a work over as it's non-consensual .

"There's a slight fear of people viewing it as defacing the work, which has stopped me from working with original art rather than prints previously, but here we had a licence to do it, and anything of 'value' had been sold already at auction."

Yvette Hawkins, a paper artist of English-South Korean origin, makes installations and sculptural objects from books to explore the relationship between decay and preservation. Aptly she approached her commission as an open book, not knowing what she would find in February as she looked through bags that had never been opened.

"I came across a beautiful collection of hand-bound Japanese books prints with perforations and markings," she says.

"I thought an artist must have done them but in fact it was book worms, and it was if their tracery had mimicked the the landscape drawings in the books, which was a happy accident."

She decided to work with silkworms. "I thought, 'what if they could restore the books with their silk, rather than me using my own hands?'," she says.

There turns out to be deeper symbolism in the silkworms preserving the books. "They spin their silk in a figure of eight, the symbol of infinity," says Yvette.

Simon Venus, from Ladywell, London, has created his mechanical sculpture Passed On as a eulogy to Peter and Karen Madsen, animating incongruously reassembled objects and images that he has arranged in three tableaux to contemplate mortality and transition while venerating the Madsens' gift to York.

Reminiscent of altarpieces, cabinets of curiosities and reliquaries, his magical, surreal triptych reflects his interest in science, nature, biology and anatomy, while traversing the spiritual and secular worlds with his gleefully subversive streak.

"This is the most ambitious work I've ever done," says Simon. "I've never previously incorporated 3D on such a scale, so it was a fantastic opportunity to broaden out. It meant working on it more or less every day since February, but I tend to be a night owl, so I often work to three in the morning."

The results are a joy to behold. "I like to use the bizarre juxtaposition of disparate objects," he says. "I enjoy seeing what happens."

So will you, as the past and present combine in Finding The Value to give the Madsens' auction "rejects" a vibrant future.

Finding The Value runs at York St Mary's, Coppergate, until November 2; opening hours are 10am to 5pm and entry is free.