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How the Budget affects the arts

While most post-Budget chatter was about the extension of furlough, Rishi Sunak's announcement last week committed hundreds of millions of pounds to reviving the arts, culture, and hospitality sectors once lockdown is fully lifted and life returns to normal in the second half of 2021.

Matilda Davies
· 5 min read

Chancellor of the Exchequer Rishi Sunak announced his budget for 2021 in the House of Commons last week, highlighting where additional spending will go this year. He spoke about several vital initiatives, such as the extension of the furlough scheme, but also promised £700 million to be made available to aid arts, culture and sport recover on the road out of lockdown. Of this, £390 million has been earmarked for the arts, including theatres, museums and galleries.

Now that the roadmap out of lockdown is clear and restrictions are slowly being eased, arts businesses and venues will be able to start reopening. Theatres, art galleries and museums have been hit hard by the pandemic.

Many arts and culture organisations have asked for further clarity and support following the budget, but here is what we know so far.

The Culture Recovery Fund

A large portion of the money will be going into the Culture Recovery Fund, which was created to support arts venues in 2020. Sunak has allocated £300 million to go into this fund to pump some money into the industry.

The original fund was announced in August 2020 and awarded £257 million in grants to organisations including cinemas, theatres and cultural organisations. It received wide criticism for giving the largest portion of funding to London organisations and giving large grants to for-profit organisations. We don’t yet know how this funding will be split and which organisations will benefit from the grants.

The furlough scheme

The furlough scheme has also been confirmed to be continuing until September 2021. The arts industry, particularly organisations that rely on live events, will be able to use this to continue employing staff whose jobs aren't currently viable. The government will continue paying 80 per cent of employees' wages when they cannot work. In July, employers will be asked to contribute 10%, and in August, they will need to contribute 20%. However, this scheme will continue to save the jobs of many in the industry.

Self-Employment Income Support Scheme (SEISS)

The SEISS will also continue to be offered in the 2021 budget and has opened up so that more self-employed people will be eligible than in previous months. The previous grants required a tax return from the 2018-2019 tax year, meaning many who had only recently moved to self-employment were excluded. This round, only a tax return for 2019-2020 will be required, meaning an estimated 600,000 more people will be eligible.

Given the high levels of self-employment in arts industries, this will undoubtedly offer support to many people who work in the industry. People whose turnover decreased by 30% or more are eligible for the full 80% assistance, similar to the furlough scheme.

Tax rates

In 2020, a lower VAT rate of 5% was introduced for certain hospitality companies to help them survive the pandemic. Sunak announced that this rate will be maintained at 5% until September this year. This VAT cut also applies to ticket sales for many music, theatre and other arts venues, which will help to support them as they gear up to reopen.

Other business support

Sunak also announced general support, which will go a long way to help arts venues and organisations survive the next few months and reopen soon. There is a recovery loan scheme that any businesses can apply for, offering between £25,000 and £10 million to businesses to help them continue operating.

What restrictions will there be for venues reopening?

With the current rollout of the vaccine and Covid-19 rates decreasing across the country, the roadmap out of lockdown was announced by the government earlier this month. According to the current plan, indoor and outdoor entertainment, including museums, theatres, and cinemas, will reopen from 17 May. The government has said this is a benchmark, provided rates continue to fall and the vaccine rollout continues to go to plan.

However, even when the industry reopens, there will be restrictions on the capacity for events like theatre shows and music performances. Indoor events will be allowed to run at half capacity or 1,000 people, and outdoor events will be allowed at half capacity or 4,000 people – whichever is lower. From 21 June, the government will begin testing larger events to determine how these restrictions might be eased in future.

How will the industry bounce back?

While this is a drastic improvement on the current industry-wide closures, they are still a concern, particularly for smaller venues and organisations. Many rely on filling seats to turn a profit and may not viably be able to run shows with these limits in place. With most of the additional financial support being offered until September, all we can do is hope that most organisations will be able to survive with these measures until the restrictions are lifted.

In the meantime, if you enjoy the arts but don't work in the industry, there are some things you can do to help. Many theatre and arts companies are still running virtual events which you can purchase tickets for and attend online. These help organisations to generate income when they can't in any other way. There are also several charities and funds you can donate to if you want to help support arts organisations. Many organisations and individuals have set up GoFundMe pages online to fundraise for the industry or are continuing to sell merchandise to raise income. Charities like ‘Shows Must Go On’, the Actors Benevolent Fund and other non-profit organisations are always in need of donations. If you can, think about donating or sharing these causes to help support the industry.

Matilda Davies

Matilda Davies

Matilda is an experienced journalist and content creator who has written for local, national and global publications. She is passionate about culture and lifestyle content, and connecting with audiences through these topics.