The UK Government’s 2026 Budget contains several interventions that will have an impact on the UK’s creative industries. In this blog, Creative PEC’s Policy Unit reflect on some of the key announcements and ask what they mean for the future growth of the sector.
Whilst the creative industries did not feature extensively in Chancellor John Healey’s first budget, there were nevertheless several announcements of relevance to the sector. Alongside a focus on cutting costs for businesses, devolution was framed as a primary mechanism for supporting growth and innovation throughout the UK. The government’s Fiscal Devolution Roadmap, published alongside it, sets out changes to local and regional funding in England in more detail.
In this blog, we highlight and consider some of the key announcements relevant to the creative industries.
Changes to Business Rates Relief
Many creative businesses benefit from some form of business rate relief, which were a key focus of the Autumn Budget. As confirmed pre-Budget in July, relief for eligible pubs, social clubs and live music venues across England will rise from 15% to 35% in April 2027. This excludes the largest music venues (i.e. rateable value of £1 million or above) with support targeted towards grassroots venues.
The Budget also announced that the government will be increasing the eligibility thresholds of the Small Business Rates Relief thresholds for qualifying retail, hospitality and leisure venues, including some cinemas, museums, art galleries and stately homes/historic houses. The rates will be frozen for two years, with the threshold for 100% relief increasing to a rateable value of £18,000 and the threshold for tapered relief increasing to a rateable value of £21,000.
Access to Finance Support
It is well known that creative firms face distinct challenges in accessing private finance, which holds back their ability to grow and scale. The Budget’s commitment to increase the British Business Bank’s capacity by £5bn is therefore welcome, although the government’s guidance to the bank is that half should be directed towards defence-related spending. The BBB’s ongoing work to strengthen partnerships with UK nations and regions should include a focus on providing clear routes for creative businesses to its lending and investment programmes.
In addition, the announcement of new programmes supporting women-led scale-ups provide a welcome route to address inequality in accessing finance. Our research with Creative UK found that creative organisations with female CEOs are 10% more likely to anticipate needing funding, and are 8% more likely to want to grow their business.
UK Export Finance and Visa Reform
The UK’s creative industries are internationally oriented, with 25% of creative industries micro and SME (MSME) businesses exporting in 2024, compared to only 9% of all UK MSMEs.
The Budget announced that UK Export Finance will introduce changes to the eligibility criteria of the General Export Facility, both to make it easier for new exporters to access and to increase the guarantee limit to £15mn.
Properly designed, this reform could play a valuable role in boosting the UK’s creative exports. For instance, currently almost a quarter of creative exporters do not meet eligibility criteria because they have only been trading for 1-2 years. Alongside this, our research shows that awareness of the General Export Facility is especially low among creative exporters. National and regional governments should prioritise awareness-raising campaigns, working with bodies like the Creative Trade Forum, once the eligibility guidelines are updated.
In addition to changes to export finance, the Budget also confirmed several visa changes. The High Individual Potential Visa will be expanded to recognise qualifications from 150 world-leading institutions, the visa curtailment period on Skilled Worker Visas will be increased to up to 6 months, and the graduate visa duration will be extended to 2 years. Alongside this, the Budget confirmed that the UK Government will take forward recommendations from the Migration Advisory Committee on visa salary thresholds, including re-setting the occupation specific threshold to the 25th percentile, which will support hiring of non-UK citizens to occupations with higher median salaries, like software developers.
Fiscal Devolution & Place-Based Innovation
Fiscal devolution to Mayoral Strategic Authorities (MSA) in England was a key focus of the Budget. Devolution offers the opportunity for local and regional governments to create targeted, place-based approaches to creative industries growth and investment, taking into account local needs and strengths.
The Budget has confirmed £285mn of seed funding for MSA-led Good Growth Funds in 2027-28, made up of £165mn for areas with a mayor in place and £120mn of incubator capital funding for areas that are transitioning towards strategic authority status or a devolution deal. In support of this, the government has also confirmed a borrowing facility of £1.5bn for MSAs, operational by April 2028, so that MSAs can build up the capability needed for devolved loan funding.
The Fiscal Devolution Roadmap, published alongside the Budget, sets out plans to move local and regional funding away from grant dependency and towards retaining local business rates and income tax. From 2027, MSAs will receive 20% of locally retained business rates, with income tax assignment expected to become their principal revenue source, while local authorities will retain at least 70% of business rate revenues. The end of the decade will see local areas retain 100% of business rates across MSAs and local authorities. Funding floors and periodic resets are intended to mitigate significant regional disparities arising from different local tax bases.
These fiscal reforms offer opportunities for regional and local governments to further invest in the creative industries, whilst also incentivising policies aimed at boosting regional growth and productivity. These come alongside the previously announced commitment to give fiscal powers to MSAs and Foundation Strategic Authorities (FSAs) to introduce Overnight Visitor Levies.
Together, these open up the opportunity for regions in England to reinvest the revenue raised back into local creative economies, cultural assets and infrastructure. However, key challenges in tackling regional disparities remain. Between 2009-10 and 2022-23, local authority revenue funding for culture-related services decreased by 29% in Scotland, 40% in Wales and 48% in England. There is much still to be done in ensuring access to effective sector-specific data and insights at local and regional levels to inform decision-making.
Some local areas are already taking measures to address this; for example, the North East MSA recently announced a partnership with Creative PEC to co-commission work addressing evidence gaps and strengthening the research ecosystem, as part of their Culture, Creative Industries, Heritage and Sport Strategic Framework.
Reforms to HM Treasury Green Book
Alongside the Budget, the Government also published new guidance on developing place-based business cases, a change that had been trailed last week. The guidance provides a strategic framework for coordinating investment decisions in a place, moving away from a situation where funding decisions might be relatively fragmented. This presents a genuine opportunity for local and strategic authorities to invest in arts, culture and heritage projects that have the potential to generate spillover benefits and economic growth.
Support for Self-Employed Workers
The Budget included a couple of welcome announcements for self-employed workers in the creative industries, who account for 28% of the workforce in the sector. From April 2027, the Trading Allowance of tax-free income will increase from £1000 to £3000, which means that self-employed creatives may opt to deduct this flat amount rather than their deductible business expenses. It may also benefit those who maintain small-scale commercial creative practice alongside their primary income, including early-career creatives who are looking to build their portfolio. Alongside this, from April 2029, self-employed fathers will have access to parental pay – a welcome development in fair reward as part of the Good Work agenda for freelancers
Overall, this was a measured Budget for the creative industries, reflecting the government’s focus on strengthening the role of regional governments in England in enabling growth across the United Kingdom. With creative clusters found right across the country, now is the time for local leaders to harness the strengths of their creative economies.
Read more from Creative PEC’s Policy Unit.
