Business News Industry People Labels & Publishers Legal Live Business Management & Funding Marketing & PR Top Stories

UK music industry welcomes extended COVID support schemes, but continues to call for government-backed insurance

By Chris Cooke | Published on Thursday 4 March 2021

The music industry has welcomed many of the announcements made yesterday by UK Chancellor Of The Exchequer Rishi Sunak regarding additional COVID support schemes in the months ahead. However, there was no government-backed insurance scheme for large-scale events and concerns remain regarding gaps in the support for freelancers, even though there was a widening of eligibility for that particular scheme.

Despite the generally successful roll-out of the COVID vaccine in the UK meaning there now seems to be an end in sight in terms of the impact of the coronavirus on every-day life, it remains clear that COVID restrictions are going to be in force for at least a few more months.

With many of the pre-existing COVID support schemes from government due to expire at the end of this month, all eyes were on Sunak’s budget speech yesterday for details on which schemes would be extended. Well, except most of the Chancellor’s COVID-related announcements had already been teased by him or other ministers before the speech itself.

In terms of the good news, the government’s general schemes to subsidise the salaries of employees and freelancers unable to work because of COVID restrictions – so furlough and SEISS – will be extended through to September. The freelancer scheme will also be available for the first time to the newly self-employed, opening up funding to 600,000 more people.

The VAT cut that applies to, among other things, ticket sales – so that VAT is 5% instead of 20% – will also be extended through to September. It will then increase, though there will be another six months where the rate will be 12.5%. The current business rates holiday in England will also be extended, to June, with a discount still in force after that date.

And there are new monies specifically for the cultural and heritage industries, including another £300 million for the Arts Council England managed Culture Recovery Fund.

But what about the bad news?

Well, although the freelancer scheme is being extended, there will still be plenty of self-employed people who do not qualify because of the way they have structured their freelancer businesses. Given the particularly high number of freelancers in the music industry, that remains a significant problem.

Industry groups continue to call on government and the Arts Council to ensure that, unlike last year, individuals as well as organisations will be able to apply for Culture Recovery Fund support.

Though perhaps the biggest gap in Sunak’s new package of COVID support relates to insurance. The live industry has been calling for a government-backed insurance scheme.

The recently announced road map for lifting COVID restrictions in England could mean that festivals can return from July onwards. But that road map is still subject to change.

Festival organisers want to proceed with planning for their summer events, but cannot get cancellation insurance on the commercial market. That makes it incredibly risky to spend on production costs now for August and September shows that might have to be cancelled if the COVID road map slips a few months.

The solution to that would be a government-backed insurance programme, something that has been introduced in some other countries.

While welcoming all the new and extended support schemes announced by Sunak yesterday, Jamie Njoku-Goodwin from cross-sector trade group UK Music stressed that an insurance scheme is urgently required, adding that such a scheme would actually result in fewer music-makers and music companies relying on the other schemes. He also pointed out that government support of that kind is being offered to the TV and film industries.

“We are grateful for the economic support we have received from government”, he told reporters. “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”, he added.

“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”.

Paul Reed from the Association Of Independent Festivals echoed that sentiment. “We welcome the extension to the government’s furlough scheme and continued support for the self-employed”, he said. “However, independent festival organisers would much rather mobilise their staff to plan a full and successful festival season this summer”.

“As we have repeatedly stressed, the only way they can do this is with a government-backed insurance scheme that covers COVID-19 related cancellation. 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”.

Reed also expressed disappointment regarding the VAT relief. Although he very much welcomed the extension of the 5% rate through to September, he noted a recommendation from MPs that that relief be extended much longer to help support the live sector as it starts to recover from at least fifteen months of shutdown.

“We warmly welcome the extension to the reduced VAT rate on tickets, which will really help festivals during the 2021 sales cycle”, he went on. “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 culture 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”.

As for continued gaps in the support for freelancers, CEO of the Music Managers Forum, Annabella Coldrick, honed in on a key issue that remains. “The MMF welcomes the extension of eligibility for support to the self-employed”, she said yesterday. “This is an important measure that should have an impact on our community, many of whom faced real hardship during the pandemic, although unfortunately directors of limited companies are still excluded”.

Horace Trubridge, General Secretary of the Musicians’ Union, also stressed that issues remain for many freelancers in the music industry. “We welcome the extension to the furloughing scheme and the SEISS, and we are pleased to see that the Chancellor has listened to our call for financial help for the newly self-employed”, he said.

“However, there are still a good number of self-employed musicians who do not qualify for the SEISS, and we urge the Chancellor to ensure that the new money pumped into the Cultural Recovery Fund is open to applications from the self-employed sector. This would at least go some way to plugging the remaining gaps in the SEISS”.

Despite the various concerns raised by the music industry in response to yesterday’s budget speech, the wider night-time sector was even more critical. While some clubs have been able to secure support through the various cultural sector initiatives, many in the wider night-time economy don’t qualify.

Michael Kill of the Night Time Industries Association told reporters: “In our pre-budget survey, nearly 80% of nightlife businesses said this budget was critical to their survival. Despite this, the budget is yet another statement from the Chancellor that has failed to recognise the need for additional support for the night-time economy sector”.

“We welcome the extension of VAT and rates relief, and that more money is going to hospitality and the Culture Recovery Fund”, he added. “But both of these interventions again reveal the Chancellor’s inability to comprehend the specific challenges faced by night-time economy businesses, such as nightclubs, casinos and bars, many of which have been entirely unable to open during the pandemic and face higher costs relative to wider hospitality”.

“With no meaningful expansion to CRF eligibility and no bespoke support for our sector, we are once again left with a package totally incommensurate with businesses’ costs – including spiralling commercial rent arrears”.

Also turning attention to the continued gaps in freelancer support, Kill went on: “It is also welcome that furlough has been extended and SEISS expanded, but 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”.

Kill concluded: “While the roadmap announcement gave hope to our sector last week, the Chancellor is now at risk of snatching defeat from the jaws of victory. 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”.