The UK’s Association of Independent Festivals (AIF) has warned that a large portion of the country’s independent festival sector is at risk of collapse without ‘urgent’ Government support.
Based on impact surveys, 92% of AIF festival organizers have said that their firms are at risk without Government intervention, with the effects of COVID-19 likely to result in businesses collapsing under refund requests.
The country’s wider festival sector could be facing potential refunds of up to £800m in total this summer, according to the AIF and it is predicted that at least 90% of all UK festivals will not take place this calendar year.
AIF’s 65 members have a collective capacity of 820,000 and generate an estimated £386 million for the UK economy each year, with almost 10% of that spend going to businesses based around each festival’s site.
According to the AIF, its members have average ‘sunk costs’ of £375,000 that are not recoupable, with 98.5% not covered by insurance for cancellation related to COVID-19.
A recent AIF member survey has also revealed that the sector could be facing redundancies of 59% on average and will lose over half of its workforce between September 2020 and February 2021 without support.
AIF reports that it has lobbied the UK Government through the DCMS (Department for Digital, Culture, Media & Sport ) on a range of issues related to the current crisis, including measures that could save the independent festival sector.
Examples include clarity on eligibility for grants and loans, and rolling premises license fees over to 2021 for events that do not take place this year.
AIF is calling for a continuation of all employment (furloughing and self-employed) schemes in their original form and business support packages until the festival industry can get to the planning and sales stage of 2021 events.
It also calls for clear guidance about when festivals will be able to operate, as well as any social distancing measures that would be expected in order to maintain public safety.
“They need urgent support now and ongoing support after lockdown ends and restrictions are eased. This is not a temporary shutdown of business – it is an entire year of income and trade wiped out. If support is not offered throughout the autumn, then the sector will face widespread job losses that will seriously inhibit its ability to deliver events in 2021.”
Paul Reed, AIF
AIF CEO Paul Reed, said: “While the Government has been receptive to AIF’s counsel, it has not taken meaningful action to protect our sector. Single event festival companies are seasonal businesses.
“They need urgent support now and ongoing support after lockdown ends and restrictions are eased. This is not a temporary shutdown of business – it is an entire year of income and trade wiped out. If support is not offered throughout the autumn, then the sector will face widespread job losses that will seriously inhibit its ability to deliver events in 2021.
“There is no safety net for independent festivals, many of which have fallen between the cracks of current Government support measures such as loans and grants. For example, zero percent of AIF members have been able to successfully access the Coronavirus Business Interruption Loans Scheme.
Added Reed: “UK festivals are not only an intrinsic, defining part of British culture but also an economic powerhouse that generates hundreds of millions for the economy – we urge Government to recognise them as such.”
“Next year’s festival season will hopefully offer much needed relief after a very difficult time for the country. But, for now, these independent businesses need to survive. Otherwise, every year from now could be a fallow year for independent festivals, for the emerging artists they provide a platform for, and the local economies across the UK that they generate income for.”
Picture Credit: Charlie RavenMusic Business Worldwide