Written evidence submitted by UK Music
1.1 UK Music is the umbrella body representing the collective interests of the UK’s music industry, from songwriters and composers to artists and musicians, studio producers, professional recording studios, music managers, music publishers, major and independent record labels, music licensing companies and the live music sector. UK Music exists to represent the UK’s music sector, to drive economic growth and promote the benefits of music to British society (see the Annex for a full list of members).
1.2 The £1.57 billion Culture Recovery Fund, (CRF – extended by £300 million to £1.87 billion in the 2021 Budget) was an essential policy intervention. Given the unique challenges facing the sector due to COVID many UK music businesses only survived, or are in a position to reopen, because of the CRF. However, there were issues including a lack of very small grants, support for individuals and an overall tendency to replicate issues with the broader support package which could lead to certain groups missing out twice.
1.3 In a music context the relevant funds were managed by Arts Council England (ACE), we will therefore not be commenting on any of the other Awarding Bodies, or the broader support package in detail.
1.4 In Wales, Scotland and Northern Ireland the devolved Governments were allocated a consequential that was managed by those Governments. These funds were broadly similar to the CRF. Given the devolved legislatures have their own oversight of the relevant budgets we will not be commenting on these in detail, but we will note a few examples of good practice we would have welcomed being incorporated into the CRF.
2. The Damage of COVID
2.1 The effectiveness of the CRF is inextricably linked to the scale of the crisis that the music sector has faced over the last 12 months. We stated in our submission to the Digital, Culture, Media and Sport (DCMS) Select Committee in May 2020 that the impact of the virus was particularly acute for music due to the sector’s reliance on physical spaces as an “engine for the creation and promotion” of music. This was borne out by the assessment of an ACE commissioned report in November 2020 that found music to be one of the “hardest hit” of the cultural sectors.
2.2 We estimated last year that the sector as a whole could lose £3 billion GVA. In 2020 70% of musicians saw their work fall by at least 75%. Grassroots Music Venues (GMVs) and arenas lost on average 75% of their income, and technical companies lost on average 95% of their income.
2.3 The £1.3 billion GVA produced by the live music sector in 2019 will have been reduced by up to four fifths in 2020. Therefore, without support above and beyond the general support (e.g. the Coronavirus Job Retention Scheme (CRJS), the Self-Employed Income Support Scheme (SEISS) and Business Rate Relief) the music sector could have faced almost apocalyptic levels of damage.
2.4 The scale of the challenge can also be seen in the level of mobilisation by the sector itself to support workers and businesses who have fallen on hard times. The musicians’ benevolent fund Help Musicians has supported 19,000 musicians with over £14.7 million in direct grants. UK Music members PPL, PRS for Music, the BPI, the Musicians’ Union (MU), AIM and the Music Managers Forum (MMF) have created, coordinated or funded hardship funds. The independent music community raised and distributed just under £1m in hardship grants to freelance music workers including venue and road crew, musicians, managers and others who were in serious hardship via AIM’s Covid Crisis Fund.
2.5 On top of the fiscal support UK Music members worked to fill knowledge gaps and organised information on COVID support, as well as organising guidelines and seminars with ACE representatives on applying for funding. This includes sessions conducted by the Ivors Academy and the MU, as well as the application writing support scheme and webinars offered to members by the FAC and MMF.
3. The Importance of the Culture Recovery Fund
3.1 The announcement of the CRF in July 2020 was a key turning point in the crisis for the music sector. Emergency Funding for individuals and Non-Portfolio organisations, grant finance, loan options as well as the specific fund for GMVs were lifelines for the sector. The Music Venue Trust estimated that at one point in the crisis music venues were losing £524,000 per day and over 82% had been threatened with closure. Therefore, this funding was not a moment too soon.
3.2 Given the initial lockdown was implemented in March 2020 the only question would be if the CRF could have been announced and implemented sooner. It was concerning that as late as March 2021 some funding remained unpaid.
3.3 Of the funds paid by November 2020 the Capital Grant Fund, and the over and below £1 million Grant Funding programmes had distributed, £112,956,262 to 554 music organisations according to ACE’s public reporting. Ministers stated in February 2021 that over £170 million had been distributed to music organisations, with £54 million of that specifically for music venues (in contrast to £14 million for cinemas).
3.4 The core of the CRF have been CRF Rounds 1 and 2. Round 1 made available “over £800 million to over 3500 arts, culture and heritage organisations in England, helping to support at least 75,000 jobs.” This included over £500 million in recovery grants, £160m in repayable finance, and over £100m in capital grants. The Round 2 results announced on 2nd April laid out £400 million allocated to 2,000 organisations. These announcements emphasised organisations as the main intended recipients.
3.5 This funding has been put to a range of uses in the music sector allowing some venues and businesses to meet outstanding bills, allowing others to become COVID-secure and return to limited operation during the periods of reopening in August – December 2020, as well as to invest in innovative technologies and adjustments to allow remote performances to go ahead. Many are using funding to capitalise reopening, for example 68% of festivals will be using their CRF funding to fund to try and go ahead this year.
3.6 By preserving these institutions, the CRF has played a role in securing a platform for the re-opening of the sector and its return. Festivals and venues are a key part of the talent pipeline and the music eco-system, enabling creators to make a living and their number regulates the opportunities for live performance. Some individual artists and creators indirectly benefited from ACE funding and are more likely to stay in the sector as a result, for instance Help Musicians received direct funding from the CRF to distribute to musicians. We shall tackle this in greater depth later, but overall many professions were not covered and gaps in the broader support package were not always filled.
3.7 Our music sector has a value in and of itself as a key part of our culture and what it means to be British in an increasingly globalised world, both as a touchstone and a calling card. Of the top 20 global tours of 2019 4 were by UK acts, highlighting the global attraction of the UK music sector.
3.8 The CRF has not only supported this sector, it also has a value beyond music as it is an investment in a sector that will be a driver of future growth. Pre-COVID music was a high growth sector for the UK, with a low risk of automation and it is still one of the UK’s genuinely world beating industries. In 2019 the UK music sector employed 197,168 (up 3% on 2018), provided £5.8 billion in GVA (up 11%) and exported £2.9 billion, outgrowing the UK average.
3.9 The UK music sector is one of only 3 net global music exporters and the 3rd biggest seller of recorded music. Every £10 spent in a live music venue is worth £17 to the local economy and a festival can be worth up to £27 million in total to a local economy, supporting local hospitality, tourism and supply businesses.
3.10 To highlight the benefits of the CRF we would point to the CEBR (Centre for Economics and Business Research) report on the CRF commissioned by ACE that suggested a cumulative GVA impact of “approximately £1,400m”, and further suggest given their slightly restrictive definition of roles within the sector that this would be at the low end of its potential value.
3.11 Therefore, the CRF should be assessed as a necessary investment in a strategic and powerful economic area of the creative industries that can help power the recovery the nation needs.
4. Funding Flaws
4.1 There are areas where the CRF could be improved including, support for individuals, flexibility, support for specific subsectors, and support for those who have not historically drawn on public funds.
4.2 It is worth noting that while the announcement in July 2020 was a turning point, it was made 4 months after the main job retention support was announced in March. This delay caused serious damage to the sector. After the general support was announced UK Music and others pointed out support was insufficient for many music workers and businesses. While the CRF was welcome in addressing some of these issues it had certain deficiencies.
4.3 Once announced one area where the CRF has received extensive criticism is on its perceived lack of support for individuals. While there was support, and it was helpful to some, an opportunity was missed to provide more flexible support to many of the freelancers who have borne the brunt of this crisis. In particular a chance was missed to plug the gaps in the Government’s broader support package.
4.4 According to the Government’s own figures only 34.2% of total self-employed people in the creative industries accessed the main support for the self-employed, SEISS, with people deemed ineligible due to being newly self-employed, earning over £50,000, drawing dividends in lieu of pay etc.
4.5 This is especially an issue for music as 72% of workers in the sector are self-employed. Therefore, there is a specific case for support for self-employed music workers to ensure talent retention in the sector.
4.6 The Government has suggested the CRF has successfully supported some of these people, in November 2020 pointing to £119 million that was made available for individuals. However, there were a number of inflexibilities within the programmes this funding supported that often made them unsuitable for music industry professionals.
4.7 While these funds may have received further funding since then, we are not aware of any additional programmes for individuals. The four funding streams mentioned in the Government’s written answer of 16th November 2020 were:
- £17.1 million distributed through the Emergency Response Fund for individuals
- £6 million to Benevolent Funds.
- £18 million available through their Developing Your Creative Practice fund (DYCP).
- £77.9 million available through National Lottery Project Grants (NLPG).
4.8 . These were important, but all had access issues and the last two were pre-existing funds rather than tailored funding for the COVID crisis. Of the others the £17.1 million Emergency Response Fund was only open to those with “experience” of delivering publicly funded work, experience commercial freelancers often did not have, particularly the groups most likely to miss out on SEISS such as the newly self-employed.
4.9 The £6 million given to Benevolent Funds was welcome, but these funds are tied to specific occupations by their Charity Charters and are therefore legally obligated to only support certain occupations. This meant technical staff and others often could not apply. Therefore there were no dedicated support funds through ACE for many of the creative freelancers who make up the vast majority of the UK music sector.
4.10 This contrasts with the decisions in Wales, Scotland and Northern Ireland to establish dedicated funds for creative freelancers. The result was that creative workers outside of England who fell through the cracks had a backstop, while those in England did not.
4.11 The DCYP was only open to those with at least 1 year’s experience working in the industry, thereby replicating the exclusion of the newly self-employed that we raised elsewhere as an issue with SEISS, as well as being competitive rather than needs focused and not being open to technical staff. The fund itself was limited in what it could support. The courses and funding for new equipment were welcome, but we would be wary of citing it as an example of emergency support as these items are of less utility to those music sector workers unable to work and facing immediate financial hardship than other forms of support.
4.12 The NLPGs are annual not emergency funding and do not help those who cannot currently work at all due to the restrictions. There is also the question of whether it is realistic to expect the hardest hit workers to be able to produce fully realised project plans and whether this model actually benefited those who were already in a better position to weather the storm, thereby reinforcing inequalities. We understand both the DCYP and NLPG had many more applications this year. Therefore, while the headline figures are impressive, in practice these funds often replicated existing issues or did not support those most in need – those who could not work.
4.13 The Recovery Grants also had a floor of £50,000 in the first round, this was simply not what was needed for some businesses. Though NLPGs did have changes made to make them more responsive to smaller applicants we would have welcomed more small scale loan and grant support across the board to encourage all businesses who needed to apply. Small loans and grants could have better supported the small businesses who are the least likely to have the reserves and structures to survive this shock.
4.14 Certain types of businesses also seem to have struggled to apply for support. For instance, the number of festivals applying was relatively small, only 81 of the estimated 900 UK festivals applied, 51 were successful and were awarded £8.1 million. We are looking to work with stakeholders to understand why more did not apply.
4.15 There are also questions around the accessibility of the CRF for businesses that have not applied for public funding in the past. According to ACE’s own figures 60.6% of music applications for Emergency Funding were granted while good at face value, this is 10.5% less than the average (71.1%) and 22.5% less than the most likely to be awarded discipline, which was dance. The commercial music sector has historically not engaged with public funding (an issue ACE was working to correct). Therefore, it is possible music businesses were at a disadvantage when applying for funding. We would welcome more support for first time applicants in the next round of CRF funding.
4.16 Rather than plugging gaps in the broader employment support package the CRF sometimes replicated them, supporting those with stable careers and incomes over the precariat and smaller businesses slipping through the gaps, particularly commercial technical staff.
4.17 We directly raised with DCMS and ACE the desirability of a more flexible approach with small grants open to all self-employed creatives to address gaps in the broader employment support (e.g. the newly self-employed, Company Directors and freelancers who earned over £50,000) as was done in Wales. Scotland and Northern Ireland.
4.18 Looking at the “What is this Funding For?” section of ACE’s website on Round 1 of the CRF reveals an underlying cause of many of these issues. The page states that the idea behind the Fund was to encourage businesses to “reopen, either fully or partially, or operating on a sustainable, cost-efficient basis”. This thinking is reflected in the statements of the Secretary of State Oliver Dowden to the Digital, Culture, Media and Sport Committee in October 2020 where he highlighted the role of the CRF in funding changes so that operations could return. This led to an emphasis on trying to support those who could work under some restrictions above those who could not work at all, this chimed with a desire in the sector to return to business.
4.19 Unfortunately, this approach was undermined by the deteriorating public health situation in the second half of 2020 that gave way to an extended lockdown across the UK in early 2021 rendering almost all live work unviable. This change in the practical situation was not reflected in Round 2 of the CRF, meaning that the CRF was of little use to many of those in the music sector who could not work, of whom there were more than anticipated. Round 2 also did not recognise the cumulative impact of a year of disruption. Therefore, the CRF could have been more responsive to the changing public health landscape.
4.20 The CRF would have been more effective supporting relaunch if a Government backed indemnity scheme covering costs in event of COVID induced cancellation was put in place from June 2021 to the end of the year. This would give more businesses in the sector the confidence to invest, and ideally be in addition to, as opposed to redirecting, the CRF.
4.21 As it stands businesses face either going ahead in the summer without COVID cancellation cover (risking ruin if the Government imposes further restrictions) or sitting out the season entirely, as some have announced already. Faced with that choice it is only natural that many businesses will not go ahead regardless of the CRF funding they have received, dampening a recovery that will define the medium term future of the sector.
4.22 Given the Government have already removed this agonising choice from the film and TV sector, and the existence international examples (e.g. Austria’s €300 million protective umbrella, Norway’s €34 million cancellation fund and the Dutch €345 million underwriting of festivals), it is unclear why they will not do the same for live events in the UK. If there is a risk that the roadmap will fail it should be bourn by Government rather than businesses who have been among the worst hit in the UK in the last year.
4.23 We would therefore urge the Public Accounts Committee to view the support available holistically and comment on how a more joined up approach could get extra value out of the CRF support offered.
4.24 Finally, the work done by the sector to support itself highlighted the importance of creative communities as well as industry bodies in supporting artists and creatives. Particularly given recent work highlighting the importance of clusters and communities of creatives to the creative industries it is worth considering what more can be done to support and stimulate communities of creatives through charities and representatives bodies.
5.1 The criticisms in this submission do not in any way negate the importance of the CRF to the sector and we would emphasise its importance to the survival of many music businesses. Our criticisms stem from a desire to improve the delivery of the £300 million extension of the CRF announced in the 2021 Budget, and we would welcome more discussion between ACE, DCMS and industry on how improvements can be made.
5.2 Without the delivery of the CRF in the second half of 2020, conducted at scale and at speed then the music industry (and particularly the live sector) would have been gutted, and the route to returning to 2019 levels of economic health would be all but unnavigable.
5.3 Any assessment of the rollout of the CRF must account for the dire need the sector had for rapid intervention. We hope the next round of CRF combined with other measures as set out in our Save Our Summer 2021 report can provide the foundation for the recovery the music sector and our nation need.
UK Music’s membership comprises: -
• AIM – The Association of Independent Music – The Association of Independent Music – the trade body for the independent music community, representing 1000+ independent record labels and associated businesses, from globally recognised brands to the next generation of British music entrepreneurs.
• BPI - the trade body of the recorded music industry representing 3 major record labels and over 400 independent record labels.
• FAC – The Featured Artists Coalition is the UK trade body representing the specific rights and interests of music artists. A not-for-profit organisation, they represent a diverse, global membership of creators at all stages of their careers and provide a strong, collective voice for artists.
• The Ivors Academy - The Ivors Academy is an independent association representing professional songwriters and composers. As champions of music creators for over 70 years, the organisation works to support, protect and celebrate music creators including its internationally respected Ivors Awards.
• MMF – Music Managers Forum - representing over 1000 UK managers of artists, songwriters and producers across the music industry with global businesses.
• MPG - Music Producers Guild - representing and promoting the interests of all those involved in the production of recorded music – including music studios, producers, engineers, mixers, remixers, programmers and mastering engineers.
• MPA - Music Publishers Association - with 260 major and independent music publishers in membership, representing close to 4,000 catalogues across all genres of music.
• Musicians’ Union - Representing over 32,000 musicians from all genres, both featured and non-featured.
• PPL is the music licensing company which works on behalf of over 110,000 record companies and performers to license recorded music played in public (at pubs, nightclubs, restaurants, shops, offices and many other business types) and broadcast (TV and radio) in the UK. PPL also collects royalties for members when their recorded music is played around the world through a network of international agreements with other collective management organisations (CMOs).
• PRS for Music is responsible for the collective licensing of rights in the musical works of 150,000 composers, songwriters and publishers and an international repertoire of 28 million songs.
• UK Music also has an informal association with LIVE (Live music Industry Venues & Entertainment), the voice of the UK’s live music and entertainment business. LIVE members are a federation of 13 live music industry associations representing 3,150 businesses, over 4,000 artists and 2,000 backstage workers.
 https://www.ukmusic.org/wp-content/uploads/2020/09/UK_Music_Submission_to_DCMS_Select_Committee_ImpactCOVID_7_May2020.pdf pg. 2
 https://www.artscouncil.org.uk/sites/default/files/download-file/CEBR%20Report%20-%20The%20Impact%20of%20the%20Cultural%20Recovery%20Fund%20on%20the%20Arts%20and%20Culture%20sector.pdf p. 4
 https://www.ukmusic.org/research-reports/music-by-numbers-2020/ p. 9
 https://publications.parliament.uk/pa/ld5801/ldselect/ldeucom/248/248.pdf p. 6
 https://www.artscouncil.org.uk/sites/default/files/download-file/CEBR%20Report%20-%20The%20Impact%20of%20the%20Cultural%20Recovery%20Fund%20on%20the%20Arts%20and%20Culture%20sector.pdf p. 5
https://www.ukmusic.org/wp-content/uploads/2020/09/UK_Music_Submission_to_DCMS_Select_Committee_ImpactCOVID_7_May2020.pdf p. 6
 https://www.artscouncil.org.uk/sites/default/files/download-file/CEBR%20Report%20-%20The%20Impact%20of%20the%20Cultural%20Recovery%20Fund%20on%20the%20Arts%20and%20Culture%20sector.pdf p. 7
 https://committees.parliament.uk/oralevidence/1965/pdf/ p.12
 https://www.creativescotland.com/funding/funding-programmes/:~:text=What is this fund for,of the COVID-19 pandemic.&text=We will trust that those,emergency fundi
 https://committees.parliament.uk/oralevidence/1049/pdf/ p.7