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Impact of COVID-19 on DCMS sectors: First Report Contents

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1Introduction

The DCMS sectors

1.The remit of the Department for Digital, Culture, Media and Sport (DCMS) spans a wide range of policy areas and economic sectors, from grassroots and professional sports to gambling and lotteries, from museums and the arts to telecoms and data protection.1 In 2018, these sectors contributed more than £224 billion or 11.7% of Gross Value Added (GVA), to the UK economy.2 DCMS also oversees some of the fastest growing industries: between 2017 and 2018, the creative industries’ GVA increased by 7.4%, more than five times the growth rate of the UK economy as a whole, which stood at 1.4%. This continued the trend seen since 2010, as illustrated in Figure 1.3

Figure 1: % Change in Gross Value Added 2010–2018

Source: DCMS Sectors Economic Estimates 2018 (provisional)

The rate of growth in the DCMS sectors extends to employment. In 2019, there were 5.3 million jobs across the DCMS sectors (accounting for 15.7% of the UK total), and since 2011 most sectors have experienced an above average increase in the number of jobs available, as illustrated in Figure 2.4

Figure 2: % Change in Total Employment 2011–2019

Source: DCMS Sectors Economic Estimates 2019: Employment

Yet DCMS remains one of the smallest departments by both budget and staffing, and has seen the highest turnover of Secretaries of State of any Department: the Rt Hon Oliver Dowden MP is the ninth since May 2010.5 Moreover, structural features within these sectors have rendered them highly vulnerable during the Covid-19 crisis, as we shall explore throughout this report.

2.The organisations that comprise the digital, culture, media and sport sectors, and the goods and services they provide, are highly heterogenous. As such, and in line with experiences across the wider economy, some have been less impacted by the measures introduced to curb the spread of Covid-19 than others. However, with 68% of respondents to DCMS’s own survey reporting that their businesses’ ability to trade as a viable entity is under threat, it is clear that Covid-19 presents serious challenges across the DCMS sectors.6 Parallels between the sectors illustrate why some have been, and will continue to be, particularly hard hit by loss of income, uncertainty about reopening and long-term disruptions to the workforce or supply chain. For example, tourism and live events are both highly seasonal industries, and the loss of income incurred due to cancellations or closures over spring and summer will not be replaced until 2021—at which point income will be further affected by many bookings being deferrals rather than new business.7 Many of the sectors also bring people together to share in communal experiences, be that at a football match, a concert or a hotel restaurant, to which continued social distancing measures present an existential challenge.8 It is also clear that these sectors are highly interconnected—tourists are attracted by the cultural events on offer; broadcasting and streaming generate much-needed income for sports and creatives, yet also need these events to fill their schedules—which means problems in one reverberate across the economy.9

3.The sectors under DCMS’s remit have benefited to varying extents from the emergency business support measures announced by HM Treasury.10 Indeed, 55% of respondents to a DCMS survey said that they had accessed Government support to mitigate financial pressures of the outbreak.11 Sector-specific emergency funding packages have also been made available by the numerous non-departmental public bodies that distribute Government funding and funds for good causes generated by National Lottery revenue, as illustrated in Table 1.

Table 1

DCMS’s Non-Departmental Public Bodies–Emergency Funding
Arts Council England12	£160m
Individual Practitioners’ Fund	£20m
Organisations outside the National Portfolio	£50m
National Portfolio Organisations	£90m
British Film Institute13	£4.6m
Production Continuation Fund	£2m
Film & TV Emergency Relief Fund	£0.5m
BFI Fan Covid-19 Resilience Fund	£1.3m
BFI Funded Features	£0.8m
Historic England Emergency Response Fund14	£5m
Emergency Response Fund	£2m
Emergency Heritage at Risk Response Fund	£3m
National Lottery Community Fund15	£500m
Government Charities Fund	£200m16
Funding Decisions for 6 months	£300m
National Lottery Heritage Fund17	£50m
Sport England18	£210m
Community Emergency Fund	£35m
Sector Partner Funding	£5m
Sector Simulation	£55m
Funding Rollover	£115m

In this report, we will examine how effectively these measures have addressed the distinct needs of certain sectors under DCMS’s remit.

4.The many and varied sectors under the remit of the Department for Digital, Culture, Media and Sport are integral to the UK’s national life and identity, as well as being vital drivers of economic growth and employment. Yet many parts of these sectors face an existential threat due to Covid-19 and the continued uncertainty that accompanies it.

Our inquiry

5.We launched our inquiry in April to gather experiences from the diverse sectors under our remit on how Covid-19 was affecting them.19 This followed evidence we gathered on the impact of Covid-19 on the charity and voluntary sector, which we covered separately in our report ‘The Covid-19 crisis and charities’. In that report, we expressed concerns about the suitability of HM Treasury’s business support schemes to third-sector organisations, and the scale of Government support for the charity sector at a time of diminished income and increased demand. We revisit these themes in this report, albeit in the context of different sectors, as we examine why the Government has consistently failed to recognise the scale of the challenge that Covid-19 presents to tourism, sport and culture, or the risk that losing them presents to the UK’s recovery from the crisis.

6.The majority of written evidence to our inquiry focused on culture, which we have broadly defined as including the creative industries, tourism and civil society.20 A significant number of contributions, especially those from local government bodies, dealt with cross-sector issues, again illustrating the interconnected nature of the DCMS sectors. We heard from a high number of individuals, including people working in the live events sector and its supply chains.21 To supplement this evidence, we took oral evidence from witnesses representing sports bodies, cultural organisations and artists, leading tourism attractions and civil society. A breakdown of the evidence we received is detailed in Figure 3.

We thank everyone who contributed to our inquiry. As they did so, organisations and individuals were adjusting to new ways of working and facing immense personal and professional pressures. We were struck by the dire situations outlined by so many who feel that they, or the industry they work in, have fallen through the cracks of the Government’s response to Covid-19. We also note the passion and commitment demonstrated for the UK’s sports, art forms and cultural institutions.

Figure 3

7.The purpose of this report is to scrutinise how effectively the Government is dealing with the challenges facing the sport, creative and tourism sectors, and to inform DCMS’s approach as it works with those sectors on their reopening and longer-term recovery. We also draw lessons from these industries, and DCMS’s work on digital exclusion, to assess how effectively it has advocated for its sectors across Government. We recognise that this is an evolving picture, and that for some sectors the full impact of Covid-19 might not be fully known until 2021 or later. Therefore, we will continue to gather evidence and scrutinise the Government’s funding, policies and performance in the coming months. We will consider whether to publish a further report based on that evidence.

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