29 October 2021
PEC Head of Policy Eliza Easton summarises our response to the Chancellor's Spending Review and Autumn Budget and what it means for the Creative Industries
The UK’s creative industries - from film to fashion, and from video games to the performing arts - are integral to local communities throughout the country. This is in part because of the economic importance of the sector: one in eight UK businesses are part of the creative industries, and together they contributed almost £116 billion in GVA in 2019, growing twice as fast as the rest of the UK economy as a whole in the past decade (DCMS, 2021).
Yesterday’s Spending Review therefore appropriately highlighted the creative industries’ importance to the UK's economy and wellbeing, and aimed to support the sector through investment and policy initiatives. In particular, it offered support to the arts and cultural sector (for example, through temporary rate uplifts to the Theatre, Orchestra and Museums & Galleries Exhibition tax relief).
This is much needed, as evidence indicates this has been one of the areas of the economy worst impacted by the pandemic. However, there is still more to do - there was nothing on how the Government will address the particular needs of freelancers that the PEC and others have highlighted, the talent needs of the creative sector in the light of changing migration patterns, and on the importance of recognising the Arts, Humanities and Social Sciences in R&D so that R&D tax reliefs are fully fit for purpose.
Here, we highlight those areas where we have published evidence that policy intervention could support growth in the creative industries (summarised in our representation the Treasury), and report on whether this Spending Review addresses our recommendations.
In our submission, the PEC called for an R&D tax relief system that was more inclusive for creative sectors.
Our recommendations included:
We also recommended that the Government support an AI and Creative Industries Centre within the context of its broader AI ambitions, to provide: training and skill development in AI for the creative industries, a gateway to research and development (R&D) in AI for the creative industries and commercial development for AI creative startups
The Spending Review announced:
The PEC’s representation to the Spending Review highlighted a raft of research which investigates how the creative sector can help the UK Government to ‘level up’ the UK economy - both in terms of the economic growth of different areas, and in terms of improving how people feel about the places they live in.
The Spending Review explains that ‘a variety of frameworks have been used to understand local disparities in economic outcomes’. This is welcome, and we would like to have seen support for the inclusion of cultural and heritage capital when understanding regional disparities. This is particularly vital because, as described in the Spending Review, ‘there is considerable variation in economic outcomes across the UK and narrowing these could have a significant positive impact on the UK economy.’
In this context, HM Treasury’s support for DCMS’s Cultural and Heritage Capital framework project which aims to put public investment in culture and heritage on the same evidence-based footing as natural capital is important.
Our recommendations included:
The Spending Review announced:
Our recommendations included:
Our evidence also pointed to a need to ensure fair and equal access to culture and creative education as a great leveller.
The spending review announced: