Ad industry groups warn of Covid 'cultural catastrophe'

The Government is being urged to pull out all the stops to support the creative industries and set up a Cultural Renewal Fund following a new report which warns of a “cultural catastrophe” for many sectors – from advertising and design to music and the arts – with Covid-19 predicted to spark a £74bn fall in income this year and the loss of over 400,000 jobs.

The Creative Industries Federation study, commissioned from Oxford Economics, claims that many creative sub sectors are expected to lose more than half their revenue and over half of their workforce.

Despite the Government’s Job Retention Scheme, the report projects that 119,000 permanent creative workers will be made redundant by the end of the year. The impact on employment is set to be felt twice as hard by creative freelancers with 287,000 freelance roles expected to be terminated by the end of 2020.

It is all a far cry from the pre-pandemic world, when the UK’s creative sector was growing at five times the rate of the wider economy, employing over 2 million people and contributing £111.7bn to the economy – more than the automotive, aerospace, life sciences and oil and gas industries combined.

The report predicts that film, TV, video, radio and photography will be the worst hit sector, losing £36bn in revenue (down 57%), with the sector projected to lose 42% of jobs (102,000) as social distancing constraints affect cinema capacity and the cost of film-making.

Advertising and market research is the next on line, with turnover expected to drop by £19bn (44%) projecting job losses of 26% (49,000), with spend on advertising expected to drop by £4bn in 2020 (17%).

Meanwhile, music, performing and visual arts are projected to lose £11bn in revenue (54%) and 57% of jobs (178,000), followed by publishing losing £7bn in revenue (40%) and -26% of jobs (51,000), the music industry -£3bn (50%) and -60% of jobs (114,000), theatre -£3bn (61%) and -26% of permanent jobs (12,000); design and designer fashion -£2bn (58%) and 30% of jobs (51,000); and architecture -£1bn (24%) and 2% of jobs (1,800).

There will also be steep declines for post-production and VFX -£827m; museums and galleries -£743m; crafts could -£513m; and radio -£186m.

When it comes to regional differences, perhaps unsurprisingly London and the South-East are expected to take the biggest hit; of the 406,000 creative jobs expected to be lost, 47% are projected to be in the region.

The report, released today, follows the Creative Industries Federation’s open letter to government in April calling for urgent funding for the creative sector, which was signed by over 500 leading figures from the creative industries and beyond.

In May, the Creative Industries Federation joined forces with UKHospitality and the Association of Leading Visitor Attractions to call for an extension of the Job Retention Scheme and Self Employed Income Support Scheme, as well as the introduction of targeted grant support for those sectors who will be last to return to work.

Creative Industries Federation chief executive Caroline Norbury said: “Our creative industries have been one of the UK’s biggest success stories but what today’s report makes clear is that, without additional government support, we are heading for a cultural catastrophe. If nothing is done, thousands of world-leading creative businesses are set to close their doors, hundreds of thousands of jobs will be lost and billions will be lost to our economy. The repercussions would have a devastating and irreversible effect on our country.

“We urgently need a Cultural Renewal Fund for those in the creative sector who will be hit hardest, including those industries who will be latest to return to work, those businesses unable to operate fully whilst maintaining social distancing and those creative professionals who continue to fall through the gaps of government support measures. We must also avoid a cliff-edge on vital measures such as the Job Retention Scheme and the Self Employed Income Support Scheme, which have been a financial lifeline for many parts of the creative industries and cannot be cut off overnight. ”

Advertising Association chief executive Stephen Woodford said: “We are working closely with Government to protect and rebuild the UK’s advertising industry, both within the UK as a vital engine of our economy, but also as a global hub with international trading partners.

“Top of the list is how a tax credit for advertising could help get the UK economy rapidly firing on all cylinders again. We also need to see the most ambitious international marketing campaign possible from Government for our creative industries, particularly with Brexit looming. We are ready to make all of this happen fast and with real impact.”

IPA director general Paul Bainsfair added: “These stark projections are based on the toughest overall trading times that any of us will have ever experienced. To minimise the damage, it is essential that we work together on a macro and micro level.

“On a macro level, we fully back the Advertising Association’s call to Government for a tax credit for advertising. On an industry-level, it is essential that agencies continue to assert the value of advertising in transforming businesses and ensure they have the most skilled and diverse teams in place to prosper.

“Recovery starts in recession. Spending in tough times may raise eyebrows in the boardroom but in the long term the hard data proves it is more than worth the investment.”