Summary of the Digital, Culture, Media and Sport Committee on the impact of COVID-19 on DCMS sectors

By June 10, 2020NEWS

9 June 2020 – Session: 9.31 am – 12.14 pm

Witnesses:

  1. Julian Bird, Chief Executive, UK Theatre; Caroline Norbury MBE, Chief Executive, Creative Industries Federation; Horace Trubridge, General Secretary, Musicians’ Union.
  2. Caroline Dinenage MP, Minister for Digital and Culture, Department for Digital, Culture, Media and Sport; David Knott, Director, Office for Civil Society, Department for Digital, Culture, Media and Sport; Emma Squire, Director, Covid-19 Economic Response and Arts, Heritage and Tourism, Department for Digital, Culture, Media and Sport.

Chair:  Julian Knight MP

Theatre Closures

Julian Knight MP asked how many theatres the UK was at risk of losing as a result of the COVID-19 pandemic. Julian Bird said the country could be at the start of a very worrying time for the sector. He said the latest survey from UK Theatre showed that, consistently around the UK, 70% of theatres and production companies were likely to go out of business by the end of the year. He added there were others which were at risk of extinction in a shorter time frame; he said that unless there was a change in current Government support, there would be more theatres having to make difficult decisions around their workforce such as those made by Birmingham Hippodrome. Mr Knight said one of the key issues was that effective two metre social distancing would force theatres to operate at 20% capacity. Mr Bird said this was entirely dependent on the age and architecture of the building, and capacity could range from 13% to 25%. He added that, at one metre distancing, most estimates suggested this only rose up to no more than 35% of capacity because of fixed seating. Mr Bird said this was clearly not an economic or business model on which any venue could operate; social distancing posed the greatest challenges for audiences, he said. Mr Knight asked whether this would mean forced closures of theatres. Mr Bird said an alternative would be a form of subsidy to enable theatres do some form of activity; he added that theatres undertook a large amount of community and outreach work which, though currently on pause, was very important for the social welfare of the country. Mr Bird added that there was some digital streaming of theatrical productions, but this was not a long-term business model and the money coming in from these platforms was relatively low. Mr Bird said lots of theatres were making hard decisions in order to preserve enough in financial reserves in order to come back once social distancing in an auditorium was no longer needed. He said this was happening across the world, noticeably in South Korea, Australia and Austria, countries which had plans to gradually allow fully seated stadiums, theatres, and concert halls. He added that these countries had “come out of the other side” with low levels of infection and so were able to reopen these public spaces. 

Impact of Quarantine

Mr Knight asked about the impact of the 14-day quarantine policy initiative. Mr Bird said in the case of the West End in London, Theatre UK sold over 15m tickets per year – more than any tickets sold in other cities around the world. He said around 1/3 of attendees at theatres in London were overseas tourists, of whom there were naturally very few in present times. Mr Bird added the economic spill-over from theatre in the West End saw people spending 5-6 times more in the local area than what they would spend on theatre tickets. He said bars and restaurants in the city centre were therefore very worried about where their income would be coming from. Mr Knight said he imagined the decision to increase the Congestion Charge would have further impacted the industry. 

Impact on Outreach Work

Mr Knight said the Royal Shakespeare Company (RSC) had suggested that the first element to go from theatres would be outreach work within disadvantaged communities. Mr Bird confirmed this to be a correct interpretation. He said the theatre industry was rightly proud of the work it did in education, with young people and with those in need of support and aid – work, he said, which went mostly unseen. He added that, in the main, the majority of this work had stopped, and that some theatres had said that outreach work and activity would not happen for the foreseeable future. 

Government Asks

Mr Knight asked what specific Government demands were being asked by the theatre industry, in terms of trying to ensure a vibrant theatre sector in upcoming years. Mr Bird said there were three demands: number one was around theatre workforce and help in sustaining it, which would involve changes to the Job Retention Scheme to enable theatres to keep employees, as around 70% of the workforce were freelancers missing out on any Government support from the Self-Employed Scheme. The second demand, Mr Bird said, was to work with Government on theatre recovery, with a focus on independent companies and supply chains which made up the fabric of the industry, such as costume designers and set builders. He added Theatre Tax Relief could help incentivise economic activity there. Mr Bird said the third demand was to look at how to safeguard the industry for the future, with steps taken to enable Government to take a long-term interest in the theatre sector. He added that the Enterprise Investment Scheme (EIS) had worked particularly well for the sector but there were other schemes that were also beneficial. 

Kevin Brennan MP asked for an explanation of Theatre Tax Relief, and how the Government might use it as a way of helping the sector through this time. Mr Bird said the Theatre Tax Relief gave the industry a relief on the upfront costs of putting a production on – not the running costs, but the actions taken up to staging the first public performance. Theatres would only get the relief if they were actually producing something and having economic activity in the business. This would encourage investment.  

Pay-to-view Theatre

Giles Watling MP asked whether pay-to-view theatre online would act as a necessary stop gap while theatres could not physically operate. Mr Bird said while the industry had seen some digital innovation, with some organisations making productions available for free (with optional donations); however, in the main, this was for historical productions. The reason they were able to be produced was because these productions were filmed for distribution or archival purposes: this, he said, was very expensive and could only be funded through ticket income from a long theatre run. Mr Bird said Theatre UK understood the levels of donation around the free streams of performances had been remarkably low and the industry was looking to rework that model going forward. Mr Watling asked whether there were any pay-to-view systems that had been working well. Mr Bird said he did not think this was the long-term economic solution to the theatre system and might play a small role, but only in the short term. 

Cultural Investment Participation Scheme

Mr Watling asked how the Cultural Investment Participation Scheme (CIPS) would work for the theatre industry. Mr Bird said Theatre UK had a group working on this and they hoped to talk more with Government about this. He said the scheme would enable Government to participate both in organisations that were subsidised with public support, which would see returns from commercial success and profit, in organisations working in their communities and in the commercial sector across the UK economy. Mr Bird said the scheme offered a chance for investors to become part of the theatre industry in the long-term, rather than theatre asking for grant money. Mr Watling asked whether there was a place for business angels to help with this. Mr Bird said there were initial issues around insurance and liability, on which the sector was working with Government. He added that there was much concern from the sector that when there was less public money, particularly from local authorities, that philanthropy would be affected. He said the CIPS provided a bedrock of support from the Government, from which philanthropists could participate off the back of.   

Christmas

Mr Brennan asked whether Christmas had been cancelled this year. Mr Bird said he hoped it was not; Christmas was essential for theatres, he said, and the time where most theatres were at their maximum capacity. He said it was the lifeblood for most theatres across the UK, where they could make profit that could be used later in the year for other productions and community education work. Mr Brennan asked Mr Bird to describe what had happened to organisations as a result of the current lockdown, who were aware of the long-term implications. Mr Bird said that major receiving houses, which did not produce much work independently but received visiting productions, were heavily impacted by lack of touring. Therefore, he said, even if these venues could open by Christmas, they would not have a production to stage, leading to additional pressures on venues across the country to make decisions for the next net period. Mr Brennan asked if there was any hope for pantomime in 2020. Mr Bird said pantomime was a crucial time in theatre both in terms of community and profit, with multi-generational visitors and full-capacity venues. He added that a large proportion of a theatre’s yearly cost could come in around the Christmas period. Mr Bird said pantomime season was not yet cancelled and he hoped it would not be. He added that Theatre UK had been clear with the Government in outlining the sector’s need for support in a timely fashion because most theatres had to make decisions around Christmas productions by early August. 

Public Index

Steve Brine MP noted the After the Interval survey which asked a sizeable number of people when they would feel safe returning to theatres. He said that 52% agreed that, if advised to do so, they would stay away even if theatres reopened; he asked how the industry could encourage people to have the desire to return. Mr Bird said this was a challenge not just for the theatre industry but for others, too. The figures were subject to change over time, as they already had, as the rest of the economy began to open. Mr Bird said that Theatre UK recognised it had a major role to play in making communities feel safe coming into public buildings and participating in activities. He said it would not be easy because of issues of halted tourism and public feelings of security. Mr Brine asked whether open-air theatres might be able to tide the sector over. Mr Bird said it might well be able to do this, though public attendance depended on the type of open-air theatre and the architecture necessary to not enable the spread of the virus.

Effect of Covid-19 on Musicians

Mr Brennan asked how the Covid-19 crisis had affected musicians. Horace Trubridge said all musical work (live; studio; orchestral) had disappeared; members of the Musicians’ Union had received no income from work since the mid-March to devastating effect on the profession. Many members would not be able to stay in the profession if the crisis continued much longer. Mr Trubridge said the musical industry was dependent on audiences and the Musicians’ Union could not currently see a point where venues could have audiences in attendance for live performances. He added this differed from other areas of the economy, which were poised to resume their activities: the musical industry was not like that and other countries, such as Germany and New Zealand, had set up cultural funds in recognition of this in order to sustain arts and culture. 

Government Schemes

Mr Brennan asked how valuable Government schemes, such as the Furlough Scheme and the Self-Employed Income Support Scheme (SEISS), had been to members of the Musicians’ Union. Mr Trubridge said they had been essential for their members, and as such the Union were asking Government for an extension on those schemes for the music sector. He added, upon surveying their members, a high percentage of the Musicians’ Union said they did not qualify for either scheme. Many members taught for local authorities or hubs, but were on the equivalent of zero-hours contracts for their PAYE work so were not eligible for Furlough, and made up less than 50% of their income by playing in professional concerts so could not qualify for the SEISS either. Mr Trubridge said there was a real need for a cultural fund to maintain the UK’s position on the main stage of the musical profession. Mr Brennan asked whether the Musicians’ Union was therefore calling for a more sector-specific approach to Government schemes in order to support musicians until live music was again a possibility. Mr Trubridge said money was made in the sector through live performance, and this was a fundamental problem with the relationship between artists, record labels and streaming platforms which forced musicians to ask for Government subsidies. 

Damien Hinds MP asked what a fair and sustainable formula looked like for musicians on streaming platforms. Mr Trubridge said he was referring mainly to major record labels and noted there were large independents in the UK which paid fairly. He believed record labels could be holding on to back catalogue money rather than redistributing it to the artists. Mr Trubridge added there was a fundamental problem with the streaming model itself in terms of its inability to sustain musicians in the profession, and that the Musicians’ Union was calling for a full enquiry to find out where the money was going. 

Music Venues

Mr Brennan asked about the implications of the Covid-19 crisis on music venues. Mr Trubridge said they were struggling despite the admirable efforts of the Music Venues Trust in attempting to keep venues alive. He said that, similar to the theatres, many music venues were in city centres, and if they could not continue to make any money, the landlords could consider repurposing the properties. Mr Trubridge said the UK could very easily lose half of its venues during the crisis if there was not more permanent support from Government. Record labels were worried about venues because they were breeding grounds for new talent; if they were not functioning, he said, there would be a real hiatus in the progression of new artists. He added the cultural funding model produced by Germany was very good and targeted certain areas of music, such as supporting live grassroots venues.

Social Distancing Implications

Mr Hinds asked about the effects of social distancing rules on capacities of music venues and recording studios. Mr Trubridge stated the safety and wellbeing (both of Union members and of audiences) was of paramount consideration, although he questioned whether it was necessary for performers, when in protective gear, to keep a two-metre distance apart. As for audiences in grassroots, standing music venues, distancing rules did not really work, which posed a problem. He added the economic model of seated venues would not allow for their reopening, either. Mr Trubridge said, if the music sector was going to survive, it needed financial support from Government. Mr Hinds asked how much notice musicians would need to resume cancelled tours. Mr Trubridge said three months was an absolute minimum and was subject to be longer in light of Brexit and the necessary acquirement of visas. 

Clive Efford MP asked about the effect of the 14-day quarantine on touring musicians; Mr Trubridge said this was not economically viable.

Implications on Future Musicians

Mr Efford asked what fears the Musicians’ Union had for the next generation of musicians coming into the industry and the consequence of what was happening during the Covid-19 crisis. Mr Trubridge said music, for a long time, had been a labour of love with low rewards. He said most Union members received less than £20k per year from music, so were having to do other things to supplement their income. There had been a general downgrading of music as a profession over many years. Mr Efford asked whether there was any evidence that music graduates had been deterred by the current situation. Mr Trubridge said again the Musicians’ Union had surveyed their members and 1/5 of them said they could not continue in the profession. Those who were able to continue teaching music lessons via online platforms were more likely to be able to stay in the Union. 

Orchestral Outreach

Mr Trubridge said orchestras around the UK normally did a lot of social outreach in care homes, schools, prisons, and hospital settings, helping those in need. With Bournemouth Symphony Orchestra having reduced the reliance on drugs by dementia patients by 20% through their outreach work. All of this, he said, had stopped, at great detriment to society at large. He said sector-specific funding was crucial to retain this element of the profession.

Barriers to Reopening the Creative Industries

Caroline Norbury MBE said the creative industries as a sector was huge, not just limited to theatre and music, and there were a variety of different issues in the different subsectors. She said the challenge was designing how to get back to work for so many different variables and for industries with such specific business models. There was no ‘one size fits all’ for going back to work in the creative industries, she said. Ms Norbury added that parts of the creative industries which had not suffered immediately, such as games and visual effects, would face a challenge later down the line; visual effects, for example, had been unaffected thus far because of a backlog of workable content, but once the reserve had dried up, the industry would not be able to take advantage of measures such as the Furlough Scheme. She said that characteristics of creative industries had all sorts of commercial applications further along the line and would have an impact on the UK’s economy as a whole. Mr Knight asked whether the Treasury understood the unique challenges faced by the sector. Ms Norbury said the Treasury had been very accommodating to reach out and engage in dialogue with the Creative Industries Federation, but there was a lot more to be learnt about the complexity of the sector. She added that she was unable to give Government a “simple message” exactly because of the diversity of the creative industries.  

Diversity in Creative Industries

Mr Knight said people from BAME and/or working-class backgrounds were often underrepresented in creative industries. He asked how to ensure the crisis had not damage the drive for greater diversity within creative industries. Ms Norbury said this was pertinent; the creative industries had worked very hard to address the issue of diversity and inclusion, but that there was still a long way to go. One concern raised to business leaders was that, when businesses were in trouble, they tended to focus on core business – and so there was a danger that the attention put into diversity and inclusion measures would suffer as a result of it. She said the people most affected by the lockdown were particularly young people, people who were early on in their careers and those at lower pay levels. She said, for simple business reasons, a diverse workforce was central to creative industries – so diversity and inclusion was a central business concern rather than a moral obligation.

Government Intervention

Damian Green MP asked whether Government recognised the wider benefit of all the things that the creative industries did. Ms Norbury said she believed Government acknowledged this and the public belief in the industries was clear. However, there was not sufficient hard evidence to support policy impact or fiscal intervention. Mr Green asked whether there was a wider public benefit to the creative industries which would help other sectors. Ms Norbury confirmed this was the pitch the Creative Industries Federation was making to Government. She said the creative industries not only generated a lot of economic value and employment for the country, but also fed into the foundations of the country itself.  She asked for help from the Committee in making this case to the Treasury. 

Arts Council Emergency Funding

Ms Norbury said the Arts Council Emergency Fund was welcomed, but a drop in the ocean of what was needed. Mr Watling asked how successful the funding had been. Ms Norbury said the primary focus for the Arts Council funding was to secure and sustain its portfolio of organisations that it supported. The Arts Council had done very well to turn it around so quickly and to bring forward the funding; the challenge, she said, was that it was a very small part of the spectrum. Those organisations which would benefit from the Arts Council funding might be one case, she said, but they were part of an ecosystem of a lot of other players and smaller organisations which would not receive anything – particularly in parts of the country where “levelling up” counted the most. 

Creative Coalition

Mr Watling asked what a stability plan looked like for the future. Ms Norbury said it was important to establish a national partnership with Scotland, Wales, and Northern Ireland, who were able to bring sector-specific support (like that in other countries) in a way that England had not. She added the Creative Industries Federation was working to make sure they were connecting with combined authorities and Local Enterprise Partnerships who had resources at hand. A creative coalition, she said, was vital.  

Recovery Plan

Mr Knight said a case had become clear for a specific recovery plan in the creative sectors and asked what conversations DCMS was having regarding this with Treasury. Caroline Dinenage MP said the department was talking about a range of different financial measures, some of which were discussed over the weekend with Sam Mendes and Print Media. She said they were looking at Rescue, Recovery and Renewal: rescuing those in need, recovering the sector more broadly and moving forward into the future. She said it was also important to take into consideration theatres and musical venues which were struggling before the epidemic. 

Impact of Government Policy on Tourism

Mr Knight asked whether Government’s policies of social distancing and 14-day quarantine were worth the economic self-harm, particularly to the creative industries. Ms Dinenage said the evidence on social distancing was not clear and that she had personally been questioning the DHSC on this. She said she recognised the quarantine measures would make things difficult for the creative sector and that this policy would be reviewed at three-week intervals. Mr Knight said 90% of inbound tourism would not happen as a result of Government policy, and so creative industries such as theatre would not get a boost at the time they most needed it. Ms Dinenage said DCMS had made it clear that particular sectors would be affected by these policies and that this would have clear economic consequences. The main concern of Government was to stop the spread of Covid-19, so the case being made for the creative industries was against this backdrop.

Mr Efford asked whether there was pushback from creative industries which benefitted from tourism – specifically the music industry – against the 14-day quarantine.  Ms Dinenage said there had been pushback from creative industries which would be affected. Ms Squire added key stakeholders in the tourism sector had made public pushback which was covered by UK media. DCMS was part of cross-Whitehall discussions, as the Government was considering the concept of international travel corridors and how this could be implemented in practice. Mr Efford asked whether the Department had asked to see the science behind this and challenged the decision of the 14-day quarantine. Ms Squire said the Government’s Chief Scientific Advisor sat on SAGE and the Ministers were all part of the decisions being made. She added DCMS were closely monitoring the R number within the UK and believed that now was the time to introduce this measure. Mr Efford asked whether DCMS was making any specific representations to the Treasury for some special consideration for areas which were particularly sensitive to the impact of policy impact on tourism. Ms Dinenage said the Chancellor was extending the SEISS until August, with payments going through until October, by which stage she hoped they would have a better idea of what was happening.

Cultural Renewal Task Force

Mr Brennan asked whether the minister was involved in choosing the Cultural Renewal Taskforce. Ms Dinenage said she had not made any final decision but was able to suggest names for the eight working groups beneath the taskforce. Emma Squire said the members were ultimately chosen by Secretary of State Oliver Dowden after consultation with experts in the department.   

Digital Skills and the Digital Divide

Julie Elliott asked whether any money from Government had yet arrived for the digital skills scheme they claimed to support. Ms Dinenage said DCMS estimated around 1.9m people lacked internet access and 11.5m people did not have smartphones, making it difficult for people to be fully digitally engaged. The DfE had been providing digital equipment to care leavers and those who were in care or vulnerable. The DCMS was also working with DevicesDotNow. Ms Elliott asked whether Government had put any money into the campaign. Ms Dinenage said they had not directly. 

Ms Elliott said around 25% of people who got shielding letters – all of which detailed online connections and links – had no online access or connectivity. There was also a high percentage of children without access to a device or data, who were therefore unable to participate in online learning. Ms Elliot said she was concerned the Government was not reaching these groups of people. She asked who had access to relevant funding, if DCMS did not. Ms Dinenage said, before the crisis, Government was not fully aware of the scale of the digital divide in the country. The crisis had shown the importance of people staying connected to information, but DCMS did not have reserves to spend on this at present. She said she had written to 95 different organisations to ask what they were doing; because of this, industry had enabled 1,600 vulnerable people to be connected with devices and trained how to use them. Ms Squire added the Minister was working on guidance for the safe reopening of libraries; Ms Elliott noted, with the cuts to local government in the past 10 years, libraries had virtually disappeared in many communities which needed them the most. 

Self-Employed Workers in the Creative Industries

Mr Brine noted the Chancellor, when extending the SEISS into the Autumn, said there would be no more revisions to the scheme. He asked how much DCMS lobbied for people who were left out of the SEISS and whether they were continuing to do so. Ms Dinenage said the Treasury had made Universal Credit more openly available and more generous in order to help those left out of the SEISS; however, there were issues with people who ran limited companies. Ms Squire said the Department’s focus was on sharing all of the evidence gathered with Treasury and looking at where the gaps were, rather than trying to design a solution to the gaps. She said the DCMS survey results would be published on GOV.UK later this week.

October Bank Holiday

Mr Green asked whether there was a departmental view on whether an October Bank Holiday would help boost the cultural sector and the wider economy for which DCMS had direct responsibility. Ms Dinenage said she was unable to say for sure that there was an approved DCMS view on this, but that she believed it to be necessary to promote Britain and British culture once lockdown ended. Ms Squire added there were no plans to introduce an additional Bank Holiday in 2020 but DCMS was interested in creative ideas for boosting the tourism sector, which would have knock-on effects on the cultural and creative industries sector.

CIPS and Representation

Mr Watling said theatre was one of the first and hardest hit by lockdown and they would be one of the last to come out of it.  He said the CIPS sounded like a good idea but asked for assurance from DCMS that representations to the Treasury would continue to invest into the theatre industry and push it back to its place at the fore. Ms Dinenage said one of her responsibilities at DHSC was that of social prescribing, and she had personally witnessed the profound effect of art and music on people’s lives. DCMS had received a number of good suggestions, one of which being the inclusion of technology which the Department had then shared with NHSX. DCMS were feeding ideas both to those who could give them financial support and to those who could provide other solutions.  

Festival 2022

Mr Efford said many industries and organisations who would have wanted to participate in Festival 2022 had been badly affected during the crisis. He asked whether this caused any concern about the preparations for Festival 2022 and whether this was informed in any funding that Government might be looking to make available in those sectors. Ms Dinenage said there had been calls to scrap Festival 2022 altogether and put that money into paying people’s wages over this period. DCMS had talked to the sector, but the sector would rather Government invested in the culture and creativity commission to help the creative industries get back up and running. As such, she said, they were going ahead with Festival 2022 and she hoped it would be a nationwide celebratory event. Ms Dinenage that Covid-19 had been a good indication of what could be done at pace.

Online Harms Legislation

Mr Hinds asked when the Committee would see the Online Harms Legislation, which Ms Dinenage had said would be world-leading and the most comprehensive package of reform in this sphere. Ms Dinenage said, prior to Covid-19, DCMS had hoped to publish their response to the legislation over the summer, but this had been delayed. DCMS had committed to getting this done during this session of Parliament and Covid-19 had, in many ways, educated the Department’s response. 

Mr Hinds asked what powers the Department envisaged OFCOM having in relation to enforcing the removal of misinformation and disinformation. Ms Dinenage said it was vital the public had access to accurate information, particularly in uncertain Covid-19 times, and they would look to Government for these sources. She added this was why DCMS had made the decision to fight for the Counter Disinformation Unit in March, which brought together all cross-Government monitoring; it was then the role of the DCMS to liaise with social media platforms to take disinformation down, she said. Ms Dinenage said the Online Harms Legislation was trying to balance Freedom of Speech and Freedom of Expression alongside protecting people from harmful information. Mr Hinds asked whether, ultimately, the UK needed global institutions for legislation. Ms Dinenage said a lot of countries around the world were looking at the UK to observe how they were moving forward but agreed social media platforms and online providers used by British residents were not UK companies. She said it was important to build up a global approach to tackle the issue of online harms. 

Mr Knight asked whether social media had had a good or bad disinformation war. Ms Dinenage said Government had seen some very good practice with many organisations changing their way of working in order to get proactive information to their followers.

Immersive and Addictive Technologies

Mr Knight noted DCMS had announced a call for evidence on loop boxes, which the Committee had highlighted as a real harm for children. He asked whether the Department would commit to a timeline for the call for evidence. Ms Dinenage said the reason the DCMS had chosen a call for evidence-based on Committee recommendations that there was not currently very robust evidence on the harm of loop boxes. She said the call would be launched in the summer and the Department wanted to announce conclusions and next steps by the end of the year.

Mr Knight asked what Government was doing to ensure age restrictions on online games and social media were robustly supported by online platforms. Ms Dinenage said in 2019, the Government had called on industry to adopt the age rating recognised by all consumers; DCMS would be making a further assessment of the voluntary compliance to work with industry to ensure adoption across every major platform. She said she would not rule out legislative action, but it would be a final resort. 

 

 

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