Creative Industries in the 2024 Spring Budget
The creative industries are a significant part of the UK economy. Spanning sub-sectors from advertising and music, to design, film TV, and publishing, they generated an estimated £124.6bn in GVA in 2022 and accounted for 2.4 million jobs in the same year. They also play a key role in British soft power globally: Creative PEC research has shown how they are an increasingly international sector in their reach, despite some of the challenges associated with the long tailwinds of COVID-19 and the UK’s exit from the European Union. In last year’s Spring Budget, the Chancellor identified the creative industries as one of five priority growth sectors, which was followed shortly after by publication of the Creative Industries Sector Vision in June 2023.
Last week’s Spring Budget included several substantial new measures that will help the creative industries. In this blog, we outline some of the key policy announcements made, as they relate to previous Creative PEC evidence and recommendations to support the inclusive and sustainable growth of the sector.
A significant package of new tax reliefs
The Spring Budget included a number of creative industries tax relief announcements, which HM Treasury estimate to be worth £1 billion in support over the next five years.
The UK’s independent film sector received a significant boost with the introduction of a new Independent Film Tax Credit at a rate of 53% for all productions with budgets of under £15 million. Following consultation at the start of the year, tax relief for visual effects has also been increased as part of the AV Expenditure Credit. The rate is set at 39%, with the removal of the previous 80% cap on qualifying expenditure. However, full details on this measure are still to be confirmed as the Government will consult on the sorts of expenditure that are to be covered, and its implementation will come into force with a new Finance Bill.
In the midst of the COVID-19, a range of temporary increases to tax relief rates for Orchestras, Theatres and Museums and Galleries Exhibitions were put in place to help the sector weather the economic downturn of the pandemic. Importantly, the Spring Budget confirmed that increased relief would be made permanent, at the following rates:
- Theatre Tax Relief: 40% for non-touring productions and 45% for touring.
- Museums and Galleries Exhibition Tax Relief: again, 40% and 45% for non-touring and touring productions.
- Orchestra Tax relief: raised from 25% to 45%.
The Orchestra and Museums and Galleries relief had originally been due to end in March 2026 after a period of tapering rates, so confirmation of their permanence will offer much needed stability for organisations looking to budget for new productions.
A moment for the screen sector
The Chancellor’s speech in the House of Commons framed support for the creative industries through the success of the UK’s screen sector, which alongside the tax reliefs mentioned above, also benefited from a number of additional announcements.
All film studios in England are set to receive a 40% reduction on gross business rates for the next decade. This relief will be in addition to the existing Improvement Relief for businesses investing in their properties, with the overall aim of driving further investment in studio space. The government’s new devolution agenda is also set to support further investment in film regionally, with the announcement of funding for the Crown Works Film Studio in Sunderland as part of North East Mayoral Combined Authority (NEMCA) deeper devolution deal.
Finally, the government committed to fund the National Film and Television School proposal for an extension, subject to business case approval. If granted, this would give the School capacity to offer a further 200 apprenticeships a year, develop new cutting-edge courses, and improve facilities for students with disabilities.
A challenging time for local government
The government re-confirmed its commitment of £100 million of allocated Levelling Up funding for culture up to 2030, with institutions like the British Library North in Leeds, the Venue Cymru and V&A Dundee all being identified as recipients of investment. £15 million in funding was also earmarked for the West Midlands Combined Authority for culture, heritage and investment projects subject to business case.
However, this comes against a backdrop of significant local authority funding cuts, in some cases 100%, to culture. For instance, Birmingham City Council, which sits within the West Midlands Combined Authority, has recently announced the near total cut of its funds for arts and culture . This comes on the back of over a decade of declining culture budgets within local authorities, which Creative PEC research has also noted are the largest public funders of culture.
Creative industries and a new deal for North East devolution and investment
Despite the challenges of local arts funding, the Budget provided details of the new Level 4 (‘trailblazer’) deeper devolution deal with NEMCA mentioned above. This will establish a Growth Zone and a new package of investment potentially worth over £1.4 billion over 30 years. Among other things, the deal will devolve powers to NEMCA on affordable housing, transport, and skills and employment. It also centres culture, the creative industries, heritage and sport as an important part of driving economic growth and social infrastructure.
The devolution deal will see the establishment of a new investment vehicle to encourage cultural and creative sector growth, R&D, and new investment in the North East. NEMCA will work with local and national partners, including the Department of Culture, Media and Sport (DCMS) and Arms-Length Bodies (ALBs) to build up the region as a hub for digital, creative and music industries in particular. NEMCA and the BFI will also work together to develop a skills strategy for the region.
This announcement represents an important moment for the creative industries in the North East and North of England more broadly. The announcement comes at a time when the Creative PEC has been working with the RSA to explore the viability of developing pan-regional ‘creative corridors’ as catalysts for economic growth. Our work on the Northern Creative Corridor (NCC) with a coalition of partners, suggests that there’s the potential to boost GVA in the wider North by about £10 billion by 2030. The NEMCA creative industries partnerships approach is an interesting model of how industry, local and national governments, and ALBs might work together to coordinate regional creative industries strategies over large geographic areas and will provide a useful test case for how devolved powers can be leveraged more broadly to foster creative industries regionally.
Alongside this new devolution deal, the government also announced that the Tees Valley Investment Zone will be the first to feature the creative industries as a priority industry, with the other being digital, Our Geographies of Creativity report identified Middlesbrough and Stockton as an “incipient” cluster with growing creative activity, so the designation of the wider region as an Investment Zone has the potential to help further establish the region as a creative hub. Given Teesside’s existing freeport status, this presents a real opportunity to see how Investment Zones can work for the creative industries, not to mention the UK’s burgeoning createch (creative meets digital) sector.
Opportunities for a new government
Overall, the Spring Budget sets out a significant number of tax reliefs for creative industries, though concentrated in a number of subsectors. Whoever is elected to the UK Government after the next election, there are still plenty of opportunities to supercharge growth in the creative industries. Both the UK Government and opposition have made commitments on education and skills that have the potential to emphasise creative subjects, and as our forthcoming report UK Trade in a Creative Global Economy highlights, there remains plenty of work to do on international trade, not least through the upcoming UK-EU Trade and Cooperation Agreement review in 2026. There also potentially gains to be made in R&D, createch, and environmental policy, not to mention how policymakers can help make the sector more diverse and inclusive. The NEMCA deal is a timely opportunity to test rigorously what a focused, place-based strategy for the creative industries looks like and should not be missed.
