Questions and answers about coronavirus and the UK economy
Questions and answers about coronavirus and the UK economy

What financial support is needed for artists and the arts in the pandemic?

Coronavirus has struck a particularly hard blow to the performing arts and those whose livelihoods depend on them. Having multiple sources of financial support available for the arts and artists increases the likelihood of meeting their many and varied needs.

The creative industries are varied – and different parts require different forms of support. Artists and performing arts organisations are naturally able to participate in economy-wide schemes. But those schemes may not deal with problems specific to the arts sector – and accordingly, there are also targeted support schemes.

Financial support for the arts comes in various forms, which may be roughly identified as those directed towards structures – arts organisations and venues –which support artists by offering them work; and those aimed at direct support to individuals to promote creativity or to relieve hardship.

The UK government has stepped up to support the arts and culture specifically in addition to its other schemes, which may also help needy artists and arts organisations. There is also a long tradition of private financial support for artists and the arts in the UK by patrons, audiences and artists’ organisations, to which sustained support – first by local government, then by central government – emerged after the Second World War. Public and private funders now provide a web of sources and resources for this sector.

Economics of live performing arts

The chief economic features of the live performing arts (theatre, concerts, comedy, etc) have made them especially vulnerable to the restrictions imposed during the pandemic. The ephemeral nature of the product, the multiplicity of performers and audiences in restricted spaces, the need for long-term planning for repertoire and performers to rehearse and perform it, the fact that many venues cannot be transformed to accommodate new restrictions and, furthermore, are centrally located requiring audiences to travel to them, all combine to render live performance very difficult with social distancing.

Furthermore, there is a high fixed cost of live performances. Once the curtain goes up, revenue per performance cannot be changed. The show must go on regardless.

Taken together, these features seem to spell the death knell for live performances, at least indoors, for the duration of the restrictions.

Outdoor performances with social distancing of audiences may alleviate the picture, although the season in the UK would be short and unpredictable. Performance practices may be adaptable for a limited set of art forms for indoor performances (for example, a string quartet could space themselves out a bit more than is traditional); but the appeal for the audience is often the sheer number of performers on stage, whether in spoken or musical theatre, pop concerts or orchestral performance.

It is therefore not surprising that producers and venue-owners are saying that they cannot envisage re-opening until there is a definite date for relaxing social distancing. Most require live audiences averaging 60% of capacity to be economically viable. Theatre owner and producer Cameron Mackintosh, for example, has closed down all his theatres until 2021 – the short term – while the long term may require full-scale remodelling of venues (see Wainwright, 2020).

Economics of performers

Performers do not rely only on live performance in front of the public: they may also (or only) work on recorded work such as films, broadcasts and games streamed over the internet. These are sources of copyright earnings to their proprietors and to the performers and creators whose work is used. Those earnings are increasing with greater online use.

Nevertheless, the creation of new work is inhibited by social distancing (and could potentially relocate to countries with lower standards of health requirements or lower incidence of Covid-19). Electronic means can be deployed to ‘unite’ distant performances, as is done in recording studios, but these raise costs of production.

In the short term, TV and radio are supplying broadcasts of past live performances, keeping up the semblance of ‘normality’. The public may switch their tastes, for example, to watching live performances via socially distanced event cinema by Covid-19-tested performers – the arts analogy to football matches. The long term may also bring new work with different performance requirements and for differently constructed venues.

Given all these issues, we can evaluate the relevance of financial support for artists and the arts during the pandemic, particularly that for the performing arts.

Related question: What do we know about the impact of coronavirus on the creative industries?

UK-wide general government schemes

As indicated in my previous article at the Economics Observatory, the distinction has to be made between those who work in arts organisations as artists (performers, designers, directors, etc.) and those doing non-artistic work backstage and front of house. While both may be eligible for UK-wide general government schemes, the former face a longer break in earning from their art form using their training and skills than the latter, who are able to find employment outside the arts.

The UK-wide Coronavirus Job Retention Scheme (CJRS) for employees has applied to all workers employed by arts organisations. Performers who are employed in arts organisations, which are likely to be the bigger ones, would have benefitted from the CJRS. But given the predominance of freelance work and self-employment in the arts, the CJRS furlough scheme has only tangentially succeeded in supporting performers.

Similarly, the UK-wide Self-Employed Income Support Scheme (SEISS) excluded those who commenced self-employment after 5 April 2019, or whose self-employed income was less than 50% of their total income, which rendered it inapplicable to many artists, as noted by the House of Commons Treasury Committee report on the economic impact of coronavirus and gaps in support measures. (Submissions to that committee by various creative industry organisations, such as Equity representing actors and other performers, may be accessed here: ¶17, ¶47 et seq.)

Related question: The job furlough scheme is coming to an end: what happens next?

Support schemes specific to the arts and cultural institutions

General measures by central government, such as temporary relief from payment of VAT, also apply to arts organisations. In addition, the UK government has channelled funds specifically to support the arts via the arts councils for England, Wales and Northern Ireland (Scotland has its own funding): £1.57 billion for England, £59 million for Wales and £33 million for Northern Ireland. The package for England is made up of £880 million in grants and £270 million of repayable loans.

A further £100 million is directed to national cultural institutions via English Heritage Trust and £120 million to restart construction on cultural infrastructure projects in England.

The over-riding question is how the money will be distributed between claimants within the sectors. The Arts Council of England’s (ACE) policy on distribution illustrates the issues.

Arts Council of England

The Arts Council England is allocated £500 million under the Culture Recovery Fund: Grants programme from the total to oversee support for theatres, music and comedy venues and museums (and includes a separately announced of £2.25 million Emergency Grassroots Music Venues Fund) along with a Culture Recovery Fund: Repayable Finance scheme that is making up to £270 million in long-term loans. It is supplementing these amounts by £18 million from National Lottery Project Grants, to make £75 million available to individuals, community and cultural organisations.

The Developing Your Creative Practice scheme financed by National Lottery Project Grants is making £75 million available to individuals, community and cultural organisations with an extra £2 million in funds that support freelance arts workers, such as producers and technicians.

Overall, therefore, support is to be mainly channelled via institutions, with some specifically targeted towards individual practitioners. Arts organisations may choose to apply for finance for individuals, such as by commissioning new work.

Private schemes for assisting artists

Organisations such as professional associations and trade unions offer financial support for those in need, particularly the freelance workers not covered by government schemes – for example, the Musicians’ Union, which has its own hardship fund, and the PRS Emergency Relief Fund, which has helped over 4,000 songwriters and composers with more than £2.1 million.

For theatre, there is a network of charities to relieve hardship, including Acting for Others, a special Covid-19 fund financed by Netflix, the Royal Opera House Benevolent Fund for its employees, and the Grand Order of Water Rats charity for entertainers, to name just a few. There are many more listed on Spotlight, Film and TV Charity, Resources for Artists and Manchester International Festival.

Final remarks

Much of the rationale for the emergency government support for the arts is predicated on data on the economic contribution of the creative industries as a whole to GDP, to which ‘music, arts and culture’ contributed 8% in 2018. As in cultural economics more broadly, the case for intervention also rests on the external and public goods benefits of the arts.

Employment figures (for all the creative industries) are also invoked, although as explained above, the data are often misleading in view of the specific features of artists’ labour markets (Towse, 2019). It is easier to support those in employment than the more precarious artists.

Larger national arts organisations (the ‘crown jewels’) are likely to be protected more than smaller ones, although the latter are often the innovators. Covid-19 may be a stimulus to produce new artworks using new ways around restrictions such as social distancing. In the long run, it may lead to new layouts of venues. If these prove popular, it could be at the expense of the traditional art forms and performance conventions.

The main thrust of ACE support is to organisations, although individuals may also benefit under other government-funded schemes for cultural organisations. Funding creativity by individuals is generally difficult for governments: the outcome is unpredictable and success is uncertain, something that taxpayers may not appreciate.

Having multiple sources of support for the arts and artists increases the likelihood of supporting their many and varied needs (as Frey, 2019, has often pointed out).

In view of what we know about the economics of the live performing arts, it is hard to see that the sector as it was at the start of 2020 will survive. But this is not just about the loss for audiences: it is also about the potential loss of human capital in the performing arts and sustaining the prominent global reputation of the UK’s arts.

Where can I find out more?

‘Public Support’ by Bruno Frey, chapter 50 in A Handbook of Cultural Economics, a widely used compilation by Ruth Towse and Trilce Navarrete of short articles by experts covering all aspects of the arts and creative industries.

A Textbook of Cultural Economics: Cambridge University Press book by Ruth Towse, used for many courses, including economics of the arts, the cultural and media industries, and the digital creative economy.

Performing artists in the age of Covid-19: a moment of urgent action and potential change: Ioannis Tsioulakis and Ali FitzGibbon look at the devastating impact the pandemic is having on the performing arts sector.

Who are experts on this question?

Author: Ruth Towse
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