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“Survival threat to festivals” and across creative and culture sector

23 June 2021

In its report published today the Public Accounts Committee calls on the Government to support festivals which face a survival threat without government backed insurance indemnity against the risk of cancellation. It also raises concerns about whether freelancers and supply chains essential to the culture sector have been able to access support.

The Committee was examining the Department for Digital Culture Media and Sport’s culture recovery fund to get funds to help over 5,000 organisations survive after they had to close their doors on 23 March 2020.

In July 2020 the Culture Secretary announced a £1.57 billion support package, the Culture Recovery Fund, with a primary objective of rescuing up to 75% of arts, culture and heritage institutions and organisations at risk of financial ruin following the national lockdown. The Department is accountable for this fund.

The committee says this “biggest ever single investment in the arts and culture sector” will require “skilled oversight and management for years to come”. The Committee has particular concerns about DCMS and Arts Council England’s ability to manage £252 million ongoing loan book commitments created by the Culture Recovery Fund over the next two decades.  

The committee acknowledges the department’s efforts to help cultural bodies survive. It also highlights that some organisations reported difficulties in accessing funds and others receiving no feedback whatsoever following unsuccessful applications, leaving them in perilous financial situations. There remain big questions over whether the fund reached the freelancers, commercial organisations and supply-chain businesses essential to the sector, and this year there is also a “survival threat” to Britain’s treasured summer festivals “without a government-backed insurance indemnity package against the risk of cancellation”.

Museums, galleries, cinemas, music venues, nightclubs, theatres, arts centres and heritage sites closed their doors to visitors on 23 March 2020 when the UK entered the first national lockdown. Many organisations in the sector remained entirely or mostly closed for a year and some still are. Festivals are making difficult decisions about whether to risk their survival by going ahead this summer, but DCMS has not modelled the cost of underwriting festival indemnity insurance.

DCMS recognises the ongoing difficulties faced by organisations in the sector, even when they have received funding. The Committee says DCMS must now properly assess and account for the impact of the Fund, which also gives an opportunity for “a fresh look at the challenges the sector faces” and how DCMS can “best support the sector’s creative and economic potential in the future.”

Meg Hillier MP, Chair of the Public Accounts Committee, said:

“The pandemic has exposed just how poorly departments across Government understand the sectors that they oversee. DCMS was clear that it ‘would not save every organisation’ but we are concerned about the impact of Covid-19 on those organisations vital to the culture sector - sound engineers, lighting and technical support.

The government must urgently consider support other than cash, such as insurance indemnity or parts of the sector risk as second summer of forced inactivity with all the devastating consequences to their survival.

This is a sector famed for making the show go on, no matter what, but it has been hammered by Covid-19 – mostly unable to operate at all for most of the last 15 months. If the pandemic is allowed to steal a significant part of our creative and cultural sector it will have impoverished us indeed.”

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