Documents considered by the Committee on 27 June 2018 Contents

2Creative Europe Programme 2021–27

Committee’s assessment

Politically important

Committee’s decision

Not cleared from scrutiny; further information requested; drawn to the attention of the Digital, Culture, Media and Sport Committee

Document details

Proposal for a Regulation establishing the Creative Europe programme (2021 to 2027)

Legal base

Articles 167(5) and 173(3) TFEU; ordinary legislative procedure; QMV

Department

Digital, Culture, Media and Sport

Document Number

(39821), 9170/18 + ADD 1, COM(18) 366

Summary and Committee’s conclusions

2.1Creative Europe is the European Union’s flagship programme for investment in the creative and cultural industries of its Member States, performing a role similar to Arts Council England and Creative Scotland in the UK. Its overall objectives are to “promote […] European cooperation” on “cultural and linguistic diversity” and “heritage” and to “reinforce the competitiveness of the cultural and creative sectors” (in particular the audio-visual sector for films, television and video games). Reflecting the fact that cultural policy is only a supporting competence of the EU, with responsibility for setting such policy resting at the national level, it represents only a fraction of the EU budget: between 2014 and 2020, Creative Europe has a financial endowment of €1.46 billion (£1.27 billion), representing 0.15 per cent of total planned EU expenditure over that period.8

2.2The financial endowment of the Programme is used to support the creative and cultural sectors in two ways: through direct grants, and by means of a Guarantee Facility (which aims to compensate for the creative industries’ limited access to traditional forms of finance, by providing a guarantee to banks or other investors which invest in the sector). Funding decisions are taken by the European Commission’s Executive Agency for Culture, Audiovisual and Education (EACEA), with the support of sector-specific external advisors. However, any grant awards have to be in line with an annual Work Programme, which must be approved by a qualified majority of EU Member States on the ‘Creative Europe Committee’.

2.3The Digital, Culture, Media and Sport Committee recently reported that the UK has been “disproportionately successful” in applying for Creative Europe funding, resulting in the UK having been involved in nearly half (44 per cent) of all projects since 2014. Between 2014 and 2016, UK recipients received grants totalling €57 million, over one-tenth of the Programme’s investments over that period. As a result, the representatives of the UK’s creative and cultural industries appear to overwhelmingly favour staying part of Creative Europe even after Brexit.

2.4In May 2018, as part of the wider negotiations about the EU’s long-term budget for the period from 2021 to 2027 (the so-called Multiannual Financial Framework), the European Commission tabled a proposal for the next iteration of Creative Europe. It has proposed an increase in its budget, both in absolute terms and as a share of the total Financial Framework: over the seven-year period, the Programme would be able to invest €1.85 billion (a nominal increase of approximately €400 million compared to the current period, which according to the Commission translates to a 17 per cent increase in real terms when the EU budget is adjusted to take account of the UK’s exit from the EU).

2.5The 2021–2027 Programme, like the current iteration, would consist of three strands:

2.6The Commission proposal contains a mechanism—modelled on the current Programme—that allows ‘third’ (i.e. non-EU) countries to seek ‘association’ to Creative Europe. Under the terms of association, the creative and cultural industries of a third country are eligible for funding as if they were based in an EU Member State in return for an annual financial contribution by their Government to the budget for the Programme. The extent of such participation, with respect to the three strands (media, culture and cross-sectoral), can be varied on a country-by-country basis. As noted, the UK’s creative industries appear to overwhelmingly favour making use of this option.

2.7However, under the Commission proposal for the 2021–2027 programme, third countries would not have any “decisional powers”. This appears to be an explicit reinforcement of the current situation: Governments of associated countries would be represented as observers only—without voting rights—on the committee where EU Member States have to approve the annual Creative Europe Work Programme (which establishes how funding will be spent and under which conditions). In addition, third country participation in the media and cross-sectoral strands (which together would account for two-thirds of the Creative Europe budget) is “subject to fulfilment of the conditions set out in Directive 2010/13/EU”. This is the EU’s Audiovisual Media Services Directive, which is currently being updated. At present, there are 11 non-EU countries which are associated with Creative Europe, Switzerland being the major exception.9

2.8The Minister for the Arts (Michael Ellis) submitted an Explanatory Memorandum on the 2021–2027 Creative Europe Programme on 14 June 2018. Beyond summarising the objectives and substance of the proposal, the Minister states only that there are “no immediate new policy implications arising from the Creative Europe 2021–2027 legal proposal”, adding that “should the UK wish to continue to participate in Creative Europe as a third country (…), it would need to adhere to the criteria for third country participation”. He does not clarify if the Government is actively considering this option, and if so what the potential financial and policy implications might be.

2.9We thank the Minister for his summary of the Creative Europe proposal. Provided the post-Brexit transitional period ends on 31 December 2020 as scheduled, the UK will not be part of the Creative Europe programme by default. The Commission proposal for the 2021–2027 iteration of the programme contains a mechanism of ‘association’ which would allow the UK to remain a participant in all or parts of the programme beyond Brexit. We are disappointed that the Government is unable to confirm if it will seek to make use of this option, even though the benefits and conditions attached are not in substance markedly different from those that apply for other ‘third countries’ at present. As such, we believe it should have been possible for the Minister to at least indicate whether the option is under consideration.

2.10Any decision to seek ‘association’ with Creative Europe (as well as other EU programmes, such as the Framework Programme for Research) would come at a financial cost in the form of an annual contribution. If the UK’s hypothetical contribution were to be calculated in the same manner as Norway’s, the proposed €1.8 billion budget for Creative Europe for 2021–2027 would result in a possible €288 million (£251 million) gross UK contribution over that period, or €41 million (£36 million) per year. The net contribution would be lower, especially if UK applicants retained their current high levels of success when applying for funding.

2.11In light of the above, we ask the Minister to keep us up to date on developments in the legislative process, and inform us as and when the Government has decided whether to seek ‘association’ with Creative Europe from 2021 onwards. We also ask him to write to us by 13 July 2018 to clarify what the legal and policy implications would be if the UK were to seek association with the ‘Media’ strand of the Programme specifically, as this depends on the “fulfilment of the conditions set out in Directive 2010/13/EU”. In particular, we expect his reply to confirm whether this would effectively require continued adherence to all or parts of the Audiovisual Media Services Directive, including the recently-agreed revision of that legislation, and if so which ‘conditions’ in particular the UK would have to fulfil.

2.12In anticipation of the Minister’s reply, we retain the proposal under scrutiny, and draw it to the attention of the Digital, Culture, Media & Sport Committee.

Full details of the documents

Proposal for a Regulation establishing the Creative Europe programme (2021 to 2027) and repealing Regulation (EU) No 1295/2013: (39821), 9170/18, COM(18) 366.

Previous Committee Reports

None.


8 The total budget for commitment appropriations from annual EU budgets between 2014 and 2020 is €960 billion (in 2011 prices).

9 EFTA-EEA countries Norway and Iceland, as well as Serbia, Montenegro, North Macedonia, Albania, Bosnia & Herzegovina, Ukraine, Moldova, Georgia and Tunisia. Switzerland has sought association, but those negotiations are not yet concluded due to the dispute over the extension of free movement rights to Croatian nationals when Croatia joined the EU in 2013.




Published: 3 July 2018