What The UK 2021 Budget Means For The Arts Industry

The end of October 2021 has seen the UK government outline their plans for spending over the next three years, which is of great interest to the Arts and entertainment industries that have been severely affected by the pandemic. In terms of recovery plans and what this might look like in practical terms, a number of areas have been highlighted.

The highlights of the UK 2021 budget help outlined

Chancellor of the Exchequer, Rishi Sunak announced plans to raise the living wage across the board, as well as specifics to the Arts that have been welcomed. The government has made a strategy to end low pay, which will see the National Living Wage for over-23s increase 6.6% from £8.91 to £9.50 per hour when the budget comes into play in Spring 2022.

One plan that has been very well-received is the extension of the ‘orchestras tax relief’ and the ‘business rate relief’ for theatres and venues, which will no doubt positively impact numerous companies, businesses and freelance workers across live performance and entertainment in recovering from forced closures and furloughs in recent months. Additionally, there will be an increase of tax relief for touring theatre productions, which is moving from 50% to 45%.

Other highlights include the Department for Digital, Culture, Media and Sport (DCMS) that will have an increase of £0.6 billion by 2024-25, and extra funding of £850 million assigned to cultural institutions in England, and there will be more funding for schools in England – this is outlined as £4.7 billion by 2024-25.

Areas for concern in the UK 2021 budget

While the help Sunak has outlined above is positive and certainly goes some way towards making an impact on recovering from these tough times, there are other areas that many are still concerned about in the UK 2021 budget. The most prominent of these is the increase of taxes, notably National Insurance Contributions which are rising by 1.25%, and the current energy crisis faced nationwide by all across the UK right on the brink of the winter season.

There has also been a negative reaction to the announcement that there will be tax cuts made to champagne, for frequent flyers, and for the nation’s banks. At the same time, the Universal Credit relief has been cut to many people who are in need of it across all industries, and the government will not be reinstating this to its previous rate.

Additionally, the funding for English schools has been criticised for omitting the previous manifesto commitment to a £90 million year Arts Premium for schools – following such extensive cuts to the higher education sector in recent months, this seems quite unlikely to be reinstated. Others are concerned that the education sector has been unbalanced with a heavy focus on solely STEM subjects while arts education has faced a consistent drop in GCSE exam entrants – this number has in fact gone down by 38% in the last ten years.

Areas where the Arts industries are campaigning in the UK 2021 budget

The Equity union of performers and creative practitioners “called on the UK government to protect the creative workforce and put our industry at the very heart of its Covid-19 recovery strategy”, and submitted their 10 demands calling on the government to:

1. Increase UK government expenditure on ‘cultural services’ from 0.2% to 0.5% of GDP in line with average European levels
2. Extend and amend the Film & TV Production Restart Scheme through to 2022 at the least, and amend  the Live Events Reinsurance Scheme
3. Extend the 5% VAT rate for live event tickets and abandon the planned increase
4. Abandon the planned £20-a-week cut to Universal Credit, reverse the reintroduction of the Minimum Income Floor, extend the uplift to legacy benefits, and extend support to those on tax credits
5. Abandon the National Insurance Contribution increase for employees and the self-employed
6. Introduce a minimum income guarantee for creative workers
7. Deliver an equitable balance of funding, without cuts to established areas, through a restructured national, regional and local funding system, and establish a more inclusive artistically and socially based criteria for funding
8. Abandon the funding cut for art and design higher education courses in England
9. Provide an emergency funding package to compensate for additional costs creative workers face undertaking work in Europe
10. Ensure all publicly funded arts bodies have robust sustainability criteria to all project grant applications.

The full Equity submission is available to view online.

Elsewhere, UK Music Chief Executive Jamie Njoku-Goodwin has urged Chancellor Rishi Sunak and the Government to “strike the right note” by helping drive jobs and growth in the UK’s world-leading music industry. UK Music submitted three key measures which need urgent government action, which are detailed as:

1. Securing the talent pipeline by providing funds to enable freelancers to recover, creating opportunities through music education and enabling investment in the next generation of British music success stories.
2. Supporting and incentivising infrastructure by protecting live events from further pandemic disruptions, extending the Culture Recovery Fund while the sector recovers, permanently reducing VAT on hospitality services and ensuring a boost for touring through fostering investment from within the industry.
3. Encouraging exports abroad and fostering investment by boosting successful exports schemes including the BPI-administered Music Export Growth Scheme and PRS Foundation’s International Showcase Fund, alongside introducing a package of fiscal incentives to supercharge the industry’s export potential, a Transitional Support Package and establishing a music export office.

The measures were drawn up by UK Music, the collective voice of the music industry, and its members. The Music Industry Strategic Recovery Plan comes after UK Music published earlier this month its report – This Is Music 2021 – which revealed the devastating impact of the Covid pandemic on the sector that has wiped out one in three music jobs.

They key findings showed that:

• Employment plunged by 35% from 197,000 in 2019 to 128,000 in 2020
• The music industry’s economic contribution fell 46% from £5.8 billion to £3.1 billion in 2020
• Music exports dropped 23% from £2.9 billion in 2019 to £2.3 billion in 2020

Additionally, UK Music explain “the impact of Covid-19 was felt right across the industry in a sector where three-quarters are self-employed or freelance and were not covered by Government financial support schemes”.

Links:

UK Music Website

Equity Union Website

Also by Michelle Sciarrotta: