The chancellor Rishi Sunak today, March 3, announced a series of measures that have been welcomed by the events industry but festival organisers and representative organisations have been left frustrated by no mention of an insurance scheme similar to its restart scheme for film and TV productions.
He said the 5% reduced rate of VAT on ticket sales would be extended for six months to 30 September. It will be followed by an interim rate of 12.5% for a further six months.
As previously reported, Sunak announced an extension of the furlough and SEISS schemes until the end of September. He promised a further 600,000 self-employed people would be eligible for help as access to grants is widened.
The chancellor also spoke of the predicted £700m funding for sporting, cultural and arts organisations to help them reopen. The Culture Recovery Fund (CRF), which has provided grants to events operators and venues, will be increased by £300m from £1.57bn to £1.87bn, £90m will go museums and cultural bodies, nearly £20m will fund regional cultural projects and a further £300m will support spectator sport events operators.
Sunak also said a £150m fund will be created to enable communities to take ownership of pubs, theatres, shops or sports clubs at risk of closure.
“The chancellor today confirmed the extension of the Government-backed restart scheme for film and TV productions – a similar safety net needs to be put in place before the end of March to avoid mass cancellations throughout the UK’s festival market,”
It was announced that Corporation Tax rise will be raised from 19% to 25% in April 2023 but the rate will be frozen for companies with profits under £50,000, meaning only 10% of companies will pay the higher rate.
Sunak said the rise would be offset by “super deduction” tax relief for businesses that invest. The scheme will see companies that invest in their businesses during the next two years able to cut their tax bills by 130% of the investment cost – a measure the chancellor said was “the biggest business tax cut in modern British history”.
The chancellor also revealed plans to extend business rates relief to the end of June, followed by a 66% rate until next April.
Association of Independent Festivals CEO Paul Reed said the organisation’s members warmly welcomed the extension to the reduced VAT rate on tickets, which he said would significantly help festivals during the 2021 sales cycle: “For many AIF members, this is the first period in which they are selling tickets since the outset of the pandemic. We do, however, reiterate the recommendation of the DCMS Select Committee for VAT on ticket sales to remain at a reduced rate for three years so that the UK festival sector can fully recover.”
Reed also welcomed the £300m CRF increase and extension to furlough and self-employed schemes but he reiterated the importance of an insurance scheme, without which AIF research has shown 92.5% of its members cannot stage events.
“The chancellor today confirmed the extension of the Government-backed restart scheme for film and TV productions – a similar safety net needs to be put in place before the end of March to avoid mass cancellations throughout the UK’s festival market,” said Reed.
National Outdoor Events Association president Tom Clements also welcomed the furlough scheme extension but he said the association and its members have considerable concerns about the lack of event industry-specific measures put in place in the Budget.
He said, “Event businesses are not able to gain rate relief, as we are not seen as the same as hospitality, equally the new restart loan that was mentioned will not be underwritten for our industry, and we have seen grants for other sectors of industry that are also not available to our own. Even the furlough scheme extension will not support those events that have already had to cancel this year and won’t be receiving any income until spring 2022.
“Until the government is able to put together specific packages for our sector – in the same way as it has done for others – we will continue to suffer as we have done over the last 12 months.”
UK Music CEO Jamie Njoku-Goodwin welcomed many aspects of the Budget announcement but said more needed to be done to protect protect freelancers, and a festival cancelation insurance scheme is vitally important.
He said, “We are grateful for the economic support we have received from Government, but we don’t want to draw on that support any longer than we have to. The best way to achieve this is to ensure activity starts to happen again as soon as possible and musicians can get back into work.
“However, the clock is ticking when it comes to staging live music events this summer. Organisers are making decisions in the next few days and weeks about whether they can proceed or will be forced to cancel.
“The live music industry urgently needs a Government-backed insurance scheme to protect against the risk of losses if a festival or concert is forced to cancel due to Covid.
“We want to create an unforgettable Summer of Sound and showcase the best of British music as we emerge from the impact of the pandemic. The music industry wants to play a leading role in driving the post-pandemic economic and cultural recovery.
“To make sure we can move ahead with live events, festival and concert organisers need the confidence that there is the safety-net of an insurance scheme that is already enjoyed by the film and TV industries.”
Night Time Industries Association CEO Michael Kill also welcomed the furlough and SEISS extension but said not enough was being done for freelancers: “It’s unacceptable that the chancellor continues to let down other freelance workers in our sector who have missed out on support to date. Surveys have revealed two thirds of nightlife freelancers have been unable to access support, and today’s expansion – while welcome – will only make a small dent in this figure.”
He said that while the roadmap announcement gave hope to the events sector last week, the chancellor is at risk of “snatching defeat from the jaws of victory”.
Kill said, “With the money spent on support to date, it is ridiculous that many nightlife businesses may now fall at the final hurdle. The blame for this unnecessary personal hardship, and damage to the wider economic recovery, will fall at the chancellor’s feet, unless he acts to ensure that proportionate sector specific grant funding is available immediately for night time economy businesses.”
This story will be updated with further industry reaction.