Conclusions and recommendations
Work by the Scottish Parliament
1.We note the recent work of the Scottish Parliament’s Economy, Energy and Tourism Committee into the economic contribution of the creative industries in Scotland, and the positive engagement that Committee has had from the Scottish Government. We hope that we will have a similarly productive response from the UK Government in relation to the findings of this report. (Paragraph 5)
Scale of the creative industries in Scotland
2.The different definitions used by the UK and Scottish governments for the creative industries mean that there are two completely different figures for the scale of the creative industries in Scotland. There are also issues around how smaller enterprises are captured in government data. The absence of comprehensive data regarding the creative industries in Scotland, and the lack of a common definition of these industries across both the UK and Scottish governments, can only inhibit effective policy formation and joint-working by the two governments. (Paragraph 16)
3.We recommend that the UK and Scottish governments work together to establish how a robust assessment of the creative industries in Scotland can be achieved, and then carry this work out with a view to publishing the assessment by December 2016. This will ensure that policy decisions are made on a sound, evidential basis, and mean it is clear whether policies are supporting growth of the creative industries. The work should consider the UK Minister’s suggestion of working with industry to take forward a survey to better reflect the complexity and sophistication of the creative industries. (Paragraph 17)
Support for the creative industries in Scotland
4.Scrutiny of Scottish public bodies is a matter for the Scottish Parliament, but we note the evidence we received from Creative Scotland and Scottish Enterprise that they have taken on board criticisms about their relationship and respective roles. However, representatives of the creative industries still expressed concerns about how public agencies engage with industry, whether the current broad range of support is useful and whether a more targeted approach would be appropriate. We hope the evidence we have received on this area is of use both to the agencies involved, and also our colleagues in the Scottish Parliament should they wish to conduct any further inquiries into this subject. (Paragraph 30)
Role of UK wide bodies
5.Although the Scottish Government and Creative Scotland lead on support for the creative industries in Scotland, both UK Trade and Investment (UKTI) and the British Film Institute (BFI) operate across the UK. The evidence we have received about UKTI and BFI’s role in Scotland has been broadly positive, but it is important that UK-wide organisations bear in mind the need to work effectively for all parts of the UK, and are able to demonstrate that they are doing so. (Paragraph 36)
6.We have heard that a National Lottery distributor for the computer games industry, following the model of the BFI, could support the burgeoning games industry in Scotland and across the UK. We recommend that the UK Government consult with the video games industry in early 2016 and respond to this proposal, including consideration of how it would work in concert with measures such as the Video Games Prototype Fund. (Paragraph 37)
Public funding for the creative industries in Scotland
7.It is disappointing that neither the UK nor Scottish governments have a clear understanding of the level of public spending on support for the creative industries in Scotland. In the absence of such information, it is hard to see how either government can be sure that the level of funding is appropriate, or going to the areas where it will be most effective. We welcome the UK Minister’s encouraging response that he would think about how to show the benefit to creative industries in different parts of the UK from national schemes intended to provide support to those industries. (Paragraph 41)
8.We recommend that the UK Government work with the Scottish Government to clarify what level of public funding is provided to the creative industries in Scotland, and include this information in its response to this report. This assessment should cover the various Scottish and UK-wide funds that support these industries in Scotland. (Paragraph 42)
Creative tax reliefs
9.Although the current tax reliefs for the creative industries were welcomed by most of our witnesses, we have heard that, in practice, they have been of limited benefit to the creative industries in Scotland because of the smaller scale of Scottish creative enterprises and the draw of existing hubs such as London. As the limited information available on take up of these reliefs is not broken down to a Scotland level, it is impossible to determine the extent to which these reliefs are benefitting different parts of the UK. Given the creative tax reliefs are a UK-wide scheme, it is important that they benefit the creative industries in all parts of the UK, not just those in London and other urban centres. (Paragraph 53)
10.The UK Government should, in its response to this report, set out the benefit creative enterprises in Scotland have received from the creative industries tax reliefs, compared to the other nations and regions of the UK. We also recommend that the UK Government work with representatives of the creative industries in Scotland to assess how the creative tax reliefs could be adapted so as to be of greater benefit to Scotland. Options should include variable rates of tax relief for different parts of the UK, creating a tax relief for the music industry and piloting a tax relief for SMEs working in the creative sector. (Paragraph 54)
11.The creative industry tax reliefs have been welcomed by the creative sector in Scotland, but there is a need to take action to ensure that these incentives are taken up by companies based across the UK, including in Scotland. We recommend that the UK Government work with the Scottish Government, Creative Scotland and Scottish Enterprise to promote the availability of these tax reliefs and enable Scottish creative enterprises to benefit from them. (Paragraph 56)
Intellectual property and the European Digital Single Market
12.Intellectual property underpins the economic potential of the creative industries in Scotland, and it is essential that creative enterprises are well-informed about the UK’s intellectual property framework, and that the interests of the creative industries in Scotland are considered by the Intellectual Property Office (IPO) when changes to IP are being considered. (Paragraph 62)
13.We were encouraged to hear that the IPO already engages with Scottish industry and colleagues in Scotland, but both the Scottish Government and a number of other witnesses have told us there is a need for more effective communication with creative enterprises regarding IP issues. We recommend that the IPO work with the Scottish Government and Scottish industry groups to explore how Scottish enterprises can be supported to secure and capitalise on their intellectual property. We expect the IPO to review its operations in Scotland and respond to the concerns we have received about the need for better communication between the IPO and creative enterprises in Scotland. (Paragraph 63)
14.We have heard concerns that some of the European Commission’s proposals for a Digital Single Market could adversely affect the creative industries in Scotland, by hampering the ability of IP owners to monetise their property in different ways across Europe. The UK Government must, in its response to this report, consider and respond to the concerns we have heard. This should inform the UK’s position on the European Commission’s proposals. (Paragraph 68)
Immigration
15.We note the concerns raised by a number of witnesses, including Creative Scotland and the Scottish Government, that UK immigration rules act as a barrier to attracting and retaining talent to Scotland. We will be looking at these issues in more detail as part of our inquiry into post-study work schemes for international students. (Paragraph 71)
Rurality and broadband
16.Access to broadband is an important issue far beyond its impact on the creative industries, but we have heard that poor internet access is a particular barrier to creative enterprises in rural Scotland. It is essential the UK and Scottish governments work together to ensure the successful rollout of broadband across Scotland. (Paragraph 74)
Apprenticeships levy
17.It is troubling that the UK Government is taking forward a UK-wide apprenticeships levy on employers without setting out how proceeds from the levy will be distributed to Scotland, where skills policy is devolved. This has created a situation where it is known that Scottish employers will have to pay the levy, but it is not clear how Scotland will benefit. This indicates a lack forethought about the relationship between the UK-wide policy and the devolved area of responsibility that it relates to. We note that the UK Government is now engaging with Scottish ministers about how the skills levy will operate in Scotland, and welcome the Minister for Skill’s statement that Scotland will get its “fair share” of proceeds. (Paragraph 77)
18.We recommend that, in its response to this report, the Government clearly set out how proceeds from the apprenticeships levy will be distributed to Scotland, where skills policy—including apprenticeships—is a devolved matter. (Paragraph 78)
Broadcasting and the BBC in Scotland
19.Although the regional quotas requiring Public Service Broadcasters to commission productions outside of London have been effective in changing the balance of spending across the UK, there remain serious concerns about the extent to which the policy is helping to support a sustainable production sector in Scotland. There is also evidence that Scottish production companies are disadvantaged by poor access to commissioners. (Paragraph 90)
20.We recommend that Ofcom review its definition of out-of-London productions, with a view to ensuring that spending by Public Service Broadcasters on out-of-London productions goes to indigenous production companies. This should include looking at whether local on-screen talent and ownership of IP should be included in the criteria for regional productions. (Paragraph 91)
21.The BBC and Channel 4 should take immediate action to better engage with Scottish production companies to ensure there is no disadvantage in being located in Scotland when it comes to opportunities to win commissions. This should include locating a greater proportion of commissioners in Scotland—access to commissioners being a key issue which was highlighted to us by the Scottish production sector. (Paragraph 92)
22.We welcome the focus there has been, during the debate about renewal of the BBC Charter, on serving the different nations and regions of the UK. It is important that the BBC takes the opportunity Charter Renewal represents to ensure it responds to concerns about the extent to which its content provides for and reflects the audience in Scotland. (Paragraph 99)
23.We note the First Minister’s suggestion for a federal structure for the BBC and the possibility of a separate BBC channel for Scotland, and the comments we received both in favour and against. The BBC will no doubt take note of this debate, and in particular the principle that BBC’s future services in Scotland should represent the needs and views of the people in Scotland, as it considers its future services. (Paragraph 105)
UK Government engagement
24.The Creative Industries Council is widely regarded as a useful body for representatives of the creative industries to engage with the UK Government. It is not at all clear, given the UK-wide nature of the Council’s members and the reserved nature of many of the policy areas it considers, why this body has an England-only remit. What is clear is that the creative industries in Scotland have been at a disadvantage, as a result of exclusion from the Council, in making representations to the UK Government on reserved policy matters. We welcome the Minister’s openness to permanent Scottish representation on the Council. (Paragraph 111)
25.We recommend that the membership of the Creative Industries Council be expanded to include Creative Scotland as a full member of the council, so that the interests of creative enterprises in Scotland can be represented on reserved matters such as intellectual property and creative tax reliefs. Further, given the Council’s consideration of a number of reserved policy areas, we also recommend that the Government reconsider the “England-only” remit of the Council to reflect the interests of other parts of the UK in these policy areas. (Paragraph 112)
26.We have considered a wide range of policy areas which affect the creative industries in Scotland, and made specific recommendations, intended to improve support for and representation of the creative industries in Scotland. The central theme arising from our inquiry was that the mix of devolved and reserved policy areas, and range of UK and Scottish agencies and bodies involved in supporting and representing the creative industries, means that effective engagement between the UK and Scottish governments, and both governments and industry in Scotland, is essential. The UK and Scottish governments must work together and work with Scottish industry to take forward the recommendations we have set out in this report, in order to create an environment which enables the creative industries in Scotland to achieve their enormous potential. (Paragraph 115)
27.Given the mix of devolved and reserved policy areas affecting the creative industries, it is essential that the UK and Scottish governments coordinate effectively. We recommend that, when considering policy affecting the creative industries, the Department for Culture, Media and Sport and the Department for Business, Innovation and Skills consult with the Scottish Government on the impact on Scotland and needs of the creative industries in Scotland. We also recommend that the Scotland Office, given its responsibility for representing Scottish interests within the UK government, ensure that the Scottish Government is able to make representations to the UK Government regarding reserved policy areas which affect the creative industries in Scotland. In preparing a response to this report, the UK Government should consult with the Scottish Government on the recommendations we have made. (Paragraph 116)
© Parliamentary copyright 2015
Prepared 12 January 2016