We write on behalf of the Professional Lighting and Sound Association (PLASA) in relation to the immediate impact our industry is facing with COVID-19. We represent professionals - both companies and individuals - who supply technology and services to live events, performing arts, entertainment, leisure, TV and film. Our members are facing life changing and seriously challenging times; we have shared this with DCMS and BEIS through our industry research.
Our membership consists of manufacturers, distributers, professional services, rental and production companies along with treasured venues such as the Royal Albert Hall. It is a wide-ranging industry where the impact has varied, from manufacturers relying on global supply chains and struggling to maintain production without the essential components needed, to venues dealing with the cancellation of events and touring productions. It is also impacting our large freelance community who are employed to carry out this work.
While we welcome the Government’s £350 billion response to the crisis, we are urgently seeking clarification on the financial support available to our sector, as we are concerned that thousands of businesses could collapse over the next three months. Below is a snapshot of our members current situation and their likely future, as well as the Government support presently available to many of them.
Due to the impact of ‘lockdown’ and social distancing policies, most businesses have been forced to completely stop operating. While the industry understands that these measures are necessary to ensure public safety, it means that most have no source of revenue. When we surveyed our members, half stated that they had lost at least 50% of their business for the year; with a fifth loosing between 80%-100% of all their business 1. We released this report on 06.04.20 and anticipate the situation to have worsened by now.
A major concern is the long-term outlook for the industry, as it is wholly reliant on organised mass-gatherings. This industry cannot operate while restrictions are in place; businesses are looking at a reality that they will have no income until 2021, even after then it is an unknown.
60% of businesses working in the events industry only have liquidity for three months or less, according to research by the Business Visits and Events Partnership and the Events Industry Forum 2.
Additionally, the theatre sector is estimated to lose £630 million in income from a 12-week closure, according to a survey by SOLT and UK Theatre 3.
Some companies have applied for Government loans to assist with the immediate need for cash flow, however most companies are very cautious of taking on debt while the long-term future of the industry (over one year) is so uncertain.
Many businesses have used and welcomed the Job Retention Scheme, which has helped avoid redundancies at this moment in time.
The written guidance issued to local authorities for Retail, Hospitality and Leisure Grants is unclear regarding the eligibility of event companies, even though Chancellor Rishi Sunak confirmed in the House of Commons that event hire firms are eligible 4. This has resulted in confusion between local authorities, and many companies have had their application rejected. When we surveyed our members, only five out of the 41 respondents had been successful in obtaining a grant 5.
According to our research 5, 51% of our members should be eligible for Retail, Hospitality and Leisure Grants as their rateable value is between £15,000 a £51,000, and 21% should be able at access the SBBR grant. 16% would not be eligible because their rateable value is over £51,000. This is due to many businesses based in the London area and the need for large warehouse space to store rental equipment.
According to research 2, companies in the events sector could survive for a further one or two months if they were to receive business rates discounts afforded to the rest of the retail, hospitality and leisure sectors.
As you can see, more needs to be done. If not, businesses will become insolvent and will have to cease trading within the next quarter. Many others will have to make people redundant, creating unemployment.
The events, entertainment and performing arts industries are vital to the UK economy and must be protected at all costs. Live music made a contribution of £1.1 billion (GVA) to the UK economy in 2018 6, and it is estimated that the entire outdoor event industry contributed £30.4bn (GVA), employing 589,000 people 7.
The British Visits and Events Partnership (BVEP) 8 estimates that events account for over 50% of spend in the UK visitor economy, generating £70bn through direct spend. In total, the Department for Culture Media and Sports says that the cultural sector (which includes events, leisure, performing arts, TV and film) was the fastest growing sector in 2017, delivering a combined £100bn to the national economy 9.
We have outlined initiatives for the Government to consider for the immediate and longer term:
We respectfully ask for a meeting with you and your officials to provide more information on the challenges our members face at this critical time and to learn what support the Government is planning to put into place to further support our industry.
This industry needs more financial assistance, especially if restrictions on large gatherings are to remain in place in the long-term.
We appreciate and understand that these are unprecedented times and the Government cannot provide solutions to every challenge however, the event and entertainment sectors are pivotal to the economy and are at the heart of Britain’s cultural output.
We urge the Government to do more to ensure this great British industry remains a global leader long after this once-in-a-lifetime crisis is over.
1 PLASA Member Covid-19 impact report, 06.04.20
2 Events Industry Forum report into the prospects for the events industry supply chain during the covid-19 industry shutdown, 09.04.20
3 SOLT UK Theatre Research https://solt.co.uk/
4 House of Commons Hansard, 17.03.20, Volume 673 https://hansard.parliament.uk/Commons/2020-03-17/debates/B98846CC-107B-4FD5-8B16-5B90B09793F5/EconomicUpdate?fbclid=IwAR2r_tUphhbZOPQezB9AxHDABVXrEj3uSKq_2VuASM8n8eO4iw08_LjCjRQ#contribution-84047D59-3B5F-4B65-AB07-B3DD15700C33
5 PLASA Member Business Rates Survey, 30.04.20 www.plasa.org/wp-content/uploads/2020/04/PLASA-Business-Rates-Survey-30-April-2020.pdf
6 UK Music report Music by Numbers, 2019 https://www.ukmusic.org/research/music-by-numbers/
7 Bournemouth University study on the value of outdoor events, 2018 https://www.eventsindustryforum.co.uk/images/documents/EIF_summary_report_final.pdf
8 British Visits and Events Partnership (BVEP) manifesto for Britain’s events industry, 2019 https://www.businessvisitsandeventspartnership.com/component/phocadownload/category/10-other?download=368:bvep-events-manifesto-nov-2019
9 DCMS press release ‘Britain’s creative industries break the £100 billion barrier‘, 28.11.18 https://www.gov.uk/government/news/britains-creative-industries-break-the-100-billion-barrier