The future of UK music festivals Contents

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2The return of festivals after the Covid-19 pandemic

6.This summer is crucial for the long-term health of our festival industry. Anna Wade from Hampshire’s Boomtown told us that “it is unlikely that most events or festivals could weather the storm of no event happening in 2021” because, “most event and festival organisers only put on one event” a year.11 The return of festivals post-pandemic depends first and foremost on whether they have survived the financial hit of 2020 and can afford to start planning amidst the continuing public health uncertainty. Moreover, as festivals both rely on and sustain a wide ecosystem of staff and supply chains, the resilience of these sectors is equally important to events going ahead. The lifting of legal restrictions on large gatherings and easing of social distancing measures are also crucial for festivals to progress at economically sustainable capacities. All of these factors, however, are influenced by the size, nature and management of the particular event. Rowan Cannon told us that the Government must recognise the diversity of music festivals in the UK when planning for their return and suggested “that different decision making could be in place for different scales of festivals”.12

Financial resilience

7.At the start of 2021, the UK’s vibrant and valuable festival sector faced ruin. When festivals were forced to cancel at the start of the pandemic, many event organisers had already accrued significant sunk costs (as of March 2020, independent festivals had spent an average of £375,000 in non-recoupable costs for the year, ranging from £20,000 to £1.7 million) and very few were covered by communicable disease insurance or had sufficient reserves to see them through to 2021.13

8.The festival sector has seen many acquisitions in recent years, with formerly independent events now majority-owned by a handful of companies: 29% of festivals over 5,000 capacity are owned by Live Nation or AEG Presents.14 There were concerns that “if independent festival businesses become vulnerable to collapse due to Covid-19 it may increase acquisitions and further consolidation across the UK festival sector”, which would exacerbate challenges identified by independent events.15 For example, we were told that consolidation has “had an impact on competition, pricing and diversity”.16 The Association of Independent Festivals (AIF) told us that the large players, which might also manage an artist and promote their tours, book acts under exclusivity deals that limit the ability of independent festivals to book them too. This was echoed by an independent festival that told us that, as it cannot benefit from economies of scale, it has to pay more to book an artist than companies that can offer multiple dates.17 From the supply chain perspective, consultancy Method Events told us that:

Reduced levels of competition have had a negative effect on pricing, especially within the freelancer market which props up the industry. Day rates for experienced personnel that are burdened with significant responsibility and accountability have been restricted to much lower levels than other sectors, despite the steady increase in event ticket prices.18

The AIF identified that concern about takeovers “was cited in France’s published emergency plan to save the cultural sector which states: ‘the goal is that small festivals can benefit from (these-state backed loans) to avoid them being bought by big actors and structures’”. However, it also acknowledged that “all live music and festival companies have been profoundly affected by Covid-19”, and the UK Government should, therefore, support the whole ecosystem.19

9.The Government intended its £1.57 billion Culture Recovery Fund (CRF) to help cultural organisations weather the impact of the pandemic. In the first round of grant funding, when organisations could apply for grants of up to £50,000, more than £25 million went to festivals and organisations in their supply chains.20 The AIF told us that 71% of its members that applied for the CRF were successful, and the grants stabilised at least 65% of those recipients, ensuring they have sufficient funds to stage their events in 2021 if permitted to do so.21 However, the festivals that were unsuccessful remained:

on the brink of imminent collapse and have exhausted (or being rejected for) other options including repayable finance such as [the Coronavirus Business Interruption Loan Scheme] and Bounce Back loans. These include high profile festivals, many of whom can be considered to occupy a unique and in some cases leadership position in their regions, generating significant direct and indirect economic impacts.22

10.A closer look at the figures draws the benefit of the CRF to the sector into question. Of the 975 music festivals in the UK, only 81 (or 8%) applied for the first round of CRF grant funding and only 51 were successful, receiving approximately £8.1 million (or 1.3%) of the £622 million in grants available.23 Paul Reed told us that the AIF “had to fight very hard to get festival eligibility for the CRF” and, once they did, festivals faced barriers accessing it.24 For example, the Association of Festival Organisers (AFO) told us that in the CRF’s “documentation and the detail there was no mention of festivals, it took some considerable time to get clear answers that festivals were included as part of entertainment”.25 Boomtown’s organisers initially thought the festival was “not eligible” for the CRF and told us they “did not have quite the right resources to be able to put our all into” the application.26 Similarly, Cheshire’s Deva Fest told us that:

The Culture Recovery Fund is an utter red herring to the festival industry and was of absolutely no assistance whatsoever. We—like many other festivals—applied and were turned down. Whilst we qualified (technically) the convoluted, cumbersome and highly time-consuming application process was geared only to arts organisations who needed the funding to survive until 31st March 2021. Our event happens once a year in August. Deva Fest Ltd had an income of precisely zero in 2020—a fact deemed irrelevant by an application process so hideous that it took weeks to complete.27

11.We asked the Minister for Digital and Culture, Caroline Dinenage MP, whether the messaging around the CRF was flawed, given the relatively low numbers of festivals applying. She told us that the Government “put together an enormous package of financial support at pace and at scale” and had “busted a gut to communicate that it was available to a whole range of sectors”. Moreover, she suggested that “in the early stages a lot of the festival organisations […] had been insulated quite a lot by the very large economic package that the Government have put in place on a whole range of other fronts—everything from the furlough scheme through to the business support grants and the loans”. As organisations “had to have exhausted all of those before they could apply to the CRF”, that may have led to them not applying.28

12.Yet Steve Heap from the AFO highlighted a different reason why festivals may not have applied for the CRF: an “enormous number of festivals quite simply didn’t need £50,000, and they were honest enough to say so by not applying”. This was addressed for the second round of grants, when the minimum organisations could apply for was reduced to £25,000; however, we heard that reducing this even further to £15,000 or less could help grassroots festivals and supply chain businesses.29

13.The Government held back £258 million to support a second round of CRF grants, which was supplemented by money not allocated in the first round. Among the 2,272 successful organisations in this second round were Boomtown, which received nearly £1 million, and Glastonbury Festival, which received £900,000 to deliver two smaller events this year and carry the festival through to 2022. However, overall, the number of festivals receiving grants in the second round was broadly similar to the first.30

14.With only 8% of festivals applying for the first round of the Culture Recovery Fund, and those that were successful receiving just 1.3% of the available grants, the Government’s flagship investment in the arts was of limited benefit to the festival sector as a whole. This was in part due to the needs, resources and management structures of festivals, many of which were not used to applying for public funding. However, it also reveals that there are lessons for Arts Council England and the Department for Digital, Culture, Media and Sport to learn about how they engage with, and meet the needs of, this important part of our creative industries.

The case for Government-backed insurance

15.Insurance gives festival organisers and suppliers confidence that money will be recouped in the event of cancellation.31 It also unlocks the rest of the supply chain by enabling festivals to start signing contracts.32 The AIF estimates that a festival taking place in early July 2021 will have paid 40% of total costs by 14 June (the date when the Government will decide whether restrictions will be lifted one week later), with an initial 20% of costs having been paid in April on essential infrastructure such as licensing, policing and medical provisions.33 However, the commercial insurance market is unlikely to offer any cancellation cover relating to Covid-19 until at least 2022, which Paul Reed called a “market failure”.34

16.In January, our Chair and more than 100 co-signatories called on the Chancellor to correct this market failure and introduce a Government-backed reinsurance scheme for live events, similar to the £500 million insurance scheme that enabled film and TV production to resume earlier in the pandemic.35 It was estimated that a £650 million scheme would enable £2 billion-worth of activity to go ahead.36 The need was urgent: the long lead times in the festival industry meant decisions on events this summer were being taken at the start of the year. Steve Heap told us that to go ahead in 2021, 15% of AFO members needed to know about insurance in January, 30% by March and 27% in April.37

17.Jamie Njoku-Goodwin, CEO of UK Music, told us that while the vaccine roll-out gave “hope that the conditions will be there to be holding festivals safely […] if we don’t have the confidence now, then they will not be happening this summer—not because of the landscape, but actually because of the lack of confidence and security now”.38 The Prime Minister told the Liaison Committee in March that he does not want to see “people unwilling to take risks on productions, performances and events because they are thinking about what happened last year” and that the Government was considering how it might “top-slice some of the £1.57 billion” CRF “to see if we can be useful in that way”.39

18.Yet more than a quarter of festivals with over 5,000 capacity, including Boomtown in Hampshire and Bluedot in Cheshire, have cancelled for a further year.40 As independent events without the backing of large, transnational companies, they cannot take the financial risk in the absence of insurance.41 These cancellations will affect the amount of the CRF that reaches the sector. Dr Darren Henley, CEO of Arts Council England, told us that second round CRF grants were awarded “on the basis that those organisations will be able to trade”. He indicated that a recipient that then cancels should not lose out if it “has incurred expenditure in good faith” prior to cancelling. However, the pay-out of grants is “phased on delivery”, so following a cancellation, ACE will “have a conversation with organisations about the rest of the grant”.42

19.The case for Government-backed insurance for live events this summer intensified after the Prime Minister announced the roadmap for lifting lockdown. From 17 May, outdoor performances with a capacity of 4,000 people or 50% (whichever is lower) were permitted, with the intention to lift remaining restrictions on events from 21 June. Yet despite months of discussion between DCMS, HM Treasury and the sector, the Government continues to refuse to back such a scheme. The Minister for Digital and Culture stated in February:

The evidence of market failure must clearly demonstrate that such a scheme is the only barrier to staging events. At the moment, progress with the vaccine rollout and beating the virus is crucial in achieving the next stages for large events as set out in the roadmap. As such, HM Treasury does not believe that now is the right time for an insurance intervention.43

Likewise, the Secretary of State, the Rt Hon Oliver Dowden MP, told us that the Government will not back insurance before all restrictions are lifted under step 4 of the roadmap. If, after that point, a lack of commercial insurance remains the last hurdle to events taking place, the Government “stand ready to look at” intervening in the market. He told us that although he gets more confident “with every passing week”, the risk of new Covid-19 variants means the Government “still don’t know that we can fully go ahead with events from 21 June”, and it is not reasonable to expect taxpayers “to provide a full indemnity for those events if it is not possible for them to happen”.44

20.Government-backed insurance is crucial to mitigating the Covid-19 related risks to festival organisers and enabling them to start planning, as the vast majority do not have the financial resilience to cover the costs of another year of late-notice cancellations. Despite the events and insurance industries proposing a range of solutions for how such a scheme might work, the Government have refused to take multiple opportunities to address the market failure in the provision of insurance for live events this summer and set the conditions to unlock the significant economic and cultural contribution made by festivals and their supply chains. Although there remains considerable uncertainty around the risks of new Covid-19 variants, the Government’s plan to wait until all restrictions are lifted will simply be too late for festivals this summer. With restrictions on lower-capacity, socially distanced outdoor events already having been lifted, the Government must act now.

21.We repeat our call for the Government to introduce a time-limited insurance scheme for costs incurred by live events scheduled to take place after 21 June that may have to cancel if there is a need for, or return to, continuing Covid-19 restrictions. The scheme should run until the commercial insurance market offers sufficient cover to the events industry for Covid-19 related cancellations.

Staff and supply chains

22.In July 2020, at least 50.5% of the festival sector’s skilled workforce faced redundancy by the end of the year.45 Although the continuation of the Coronavirus Job Retention Scheme into 2021 addressed that immediate need, the sector will likely face a similar cliff-edge if unable to generate any income again this year. Festivals of all sizes are heavily reliant on a large temporary workforce: Towersey Festival in Buckinghamshire employs two full-time and four part-time staff throughout the year but supplements that with up to 100 freelancers and contractors in the run-up to the event, as well as more than 300 artists annually.46 Bournemouth 7s Festival employs a full-time team of seven but more than 1,200 additional people work on the festival each year.47 At the larger end, Boomtown employs 40 full-time staff but will have in the region of 17,000 “crew, staff, artists, guests and traders on site” during the festival itself.48 Many of these people, as well as musicians themselves, slipped through the Government’s support packages for self-employed workers.49

23.Festivals rely on extensive supply chains including technical production, staging and catering companies, many of which are small businesses.50 These were also badly affected: technical suppliers that provide staging, lights and sound systems saw revenue fall by 95% during the pandemic.51 One audio supplier, which unsuccessfully applied for the CRF and so only benefited from the furlough scheme, told us that if business doesn’t return to ‘normal’ by summer 2021 it “will no longer be sustainable” and will have exhausted all of its reserves. This will leave a permanent skills gap, with the company stating that “it is naïve to think that if we fail other companies will step in and fill the vacuum. Our competitors are all in the same position as ourselves, at whatever market level they operate at”.52#WeMakeEvents, which represents the supply chain to the live events industry, agrees that “the 2021 festival season must go ahead or there will be a profound and long-term impact on the live event supply chain—waiting until 2022 for festivals to restart will be too late”.53

24.If individuals or companies in the supply chain close down or change industry, festivals will struggle to access the goods, services and skilled staff they need to return safely.54 The volunteer leaders of MugStock festival told us that, post-pandemic, “it is questionable whether the trained staff will be available and key suppliers still operating”, while Boomtown’s Anna Wade has “seen a huge number of the people that we would normally employ have to go into different industries—for example, the scaffolders, the sound engineers, the technicians have all had to repurpose their skills elsewhere into different industries, such as construction, and that leaves a very worrying gap in our market”.55 The Sheffield City Region Music Board warned that “the loss of skilled technicians, equipment suppliers and production staff would cause huge problems for the return of festivals” because “these are the key staff who ensure that safety measures are upheld and ensure a high-quality experience on the day”. As such, “the safety of staff and public alike could suffer from the lack of staffing with this expertise and experience”.56

25.This would be compounded if, as seems likely, the 2021 festival season is condensed into a few weekends in late summer and September, putting further pressure on supply. Tour manager Tre Stead explained that even in a typical summer, although “there is huge infrastructure in the UK […] there are a lot of bands trying to do a lot of things”, and therefore equipment such as tour buses need to be booked a year in advance.57 Furthermore, #WeMakeEvents told us that “many of those that organisers are relying on to make festivals in 2021 happen are being forced to decline offers of work until they know the sector is back at a capacity which means they can sustain a living from it”. This creates a difficult situation because:

Festivals will not be able to get back to capacity if they cannot secure the skilled people that are needed to make them happen, which will stop the sector getting back to pre-Covid levels, which will mean it is unviable for those highly skilled people to return to the sector.58

26.Supply chain organisations faced similar problems to festival organisers in applying for the first round of the CRF. Overall, 90 organisations in the festival supply chain applied, with 81 successful applicants receiving approximately £17.1 million in total.59 Yet ticketing platform Skiddle said that “the process for applying was also pretty prohibitive as many people were unfamiliar with the grant writing process, couldn’t afford to pay grant writers or weren’t clear on what the applications were really asking for”.60 The size of grants was again a barrier: Tre Stead told us that a lot of smaller, limited companies could not “justify applying” as they did not need the minimum grant and that more could benefit from smaller pots for organisations that “can probably survive on £5,000 or £6,000”.61

27.We asked the Minister whether there was scope to reduce the size of minimum grants for future rounds of the CRF, but she responded that organisations in need of lower amounts could benefit from the “discretionary business grants that the Government have been funding right the way through the whole of this pandemic”.62 Although some organisations have told us they benefited from these discretionary grants, the picture remains mixed.63 PLASA, a membership body for those supplying technology and services to the entertainment industries, told us that only 12% of its members received funding from the Retail, Hospitality and Leisure Grant or Small Business Grant schemes administered by local authorities. Likewise, 27% of respondents to a National Caterers Association survey reported that they had not benefited from any Government support at all.64

28.The Government expected that organisations in receipt of CRF grants would use the money to employ freelancers and supply chains; however, evidence suggests this did not reliably occur.65 Method Events, which provides consultancy services to large festivals, told us that “the financial conservatism of promoters and event owners has caused funds to be withheld” and “suppliers are wondering whether to flag to the Arts Council that they are not benefitting from the funds as expected”.66 It stated:

a clearer mandate or covenant may have been required with the grants to ensure that they were distributed effectively. This creates a concern about the UK’s gross benefit from the funds: for festivals that are owned by overseas private equity funds, for example, there is a threat that the funds are lost to overseas companies as they refuse to open up their balance sheets to the supply chain.67

Lifting of restrictions

29.The biggest risk to festivals taking place in 2021 is if mass gatherings are not permitted or can go ahead only with restrictions that make them economically and practically unviable, such as social distancing, in place.68 The organisers of Notting Hill Carnival and Manchester’s Parklife both told us that social distancing would not be viable for their events, and UK Music told us that “the best way to support and protect the festivals sector is to get it back on its feet and enable it to start generating income again. The focus must therefore be on how we get live performances happening again at capacity”.69 However, Rowan Cannon cautioned against “the idea that festivals cannot go ahead and be socially distanced” because “it very much depends on the style of your festival”. For example, because her company’s two events “both have a capacity of around 5,000 and both have vast sites of about 100 acres”, they can “adapt our programming, put infrastructure in place and change the way we do things to enable something to happen with social distancing in place”.70

30.Early evidence to our inquiry called for “an indicative date from Government for when we can hold live music and live events at scale again”.71 We were pleased the Government recognised this in its roadmap for lifting lockdown, under which it hopes to lift all remaining restrictions on social contact and large events in step 4 (no earlier than 21 June). However, all dates have been subject to change and step 4 is subject to the findings of the Events Research Programme (ERP)—a series of pilots to provide scientific data on how small and large-scale events can safely resume.72 Furthermore, as we draft this Report, the Prime Minister has voiced concerns about the Indian variant bringing the date for step 4 into doubt.73

31.As each step of the Government’s roadmap will be announced one week in advance, festival organisers should hear about step 4 on 14 June at the latest. Yet festivals require weeks of setup, and discussions about licensing happen months in advance. We asked the Minister whether organisers would get sufficient notice to start rigging festival sites before the end of June, and when licensing authorities could confidently grant permission for festivals to take place this summer. She said the Government hoped to “be able to provide the full scientific research and evidence by the end of May” but that guidance had yet to be published to local authorities about permitting events.74

Festivals in the Events Research Programme: an afterthought?

32.During April and May, the Government held pilot events “using enhanced testing approaches and other measures to run events with larger crowd sizes and reduced social distancing to evaluate the outcomes”. The Minister told us that the findings of the ERP will be analysed by the end of May to help the Government “to determine a consistent approach to lifting restrictions on these events” in step 4.75 The timing of the ERP is crucial, and any delay could mean its findings come too late to permit 2021’s festival season. This is despite industry having called for pilots for months, and developed plans to test their own safety mitigations as far back as June 2020.76

33.We questioned whether it would be strange for 21,000 people to attend the FA Cup Final in Wembley when smaller numbers were not yet permitted to gather at a festival. The Minister told us that festivals “are quite an unusual and unique entity” and although their outdoor setting benefits from effective ventilation:

The big risk of a festival is the size, which you would get at something like the FA Cup, but equally people are not sitting down. There are typically very large crowds and an unstructured movement of people—they are not sat in one place. There are very high levels of contact and obviously behaviour that might be a little bit influenced by the odd drink, which does tend to make you forget a little bit about social contact. Obviously, the duration and scale need to be taken into consideration as well.77

34.In late March, the Minister told us that the ERP “is not based on sectors so much as on settings”, but that “the closest thing to a festival that we are looking at is a nightclub, which also allows free movement of people in an unfettered way”.78 While the Department for Digital, Culture, Media and Sport (DCMS) intended to “do a festival-type event”, the Minister said that in the first phase they were unable to deliver a “large multi-day music festival with an unstructured audience, because there are massive operational and ethical challenges to conducting something of that scale”. Indeed, there was no festival-type event in the initial list of pilots announced on 5 April; however, we were assured by the Minister that DCMS’s chief scientific adviser, Professor Tom Rodden, would “look at the best ways of filling those gaps” to give the festival sector the clarity it needs.79 This gap was at least partially addressed when the Government announced, after the Minister spoke to us, that a pilot event for 5,000 people would be held at Liverpool’s Sefton Park in early May.80

35.The Government have acknowledged that pilots held under the ERP require backing in case they are forced to cancel.81 In the absence of our preferred, sector-wide insurance option we wrote to the Secretary of State to propose extending the ERP and the liability available to the pilot events under it to a wider, yet defined, selection of events scheduled for after 21 June.82 We argued that if the Government backed a range of events including grassroots, mid-scale and large events across sport and the arts, it would enable the country to enjoy a greater number of culturally significant events this summer, support the economic recovery of the events industry and its supply chains, and build on the investment already being made into the pilots.

36.The success of the vaccine rollout and the target date announced during our inquiry under the Government’s roadmap for lifting lockdown gave hope to many that festivals will be able to take place this summer. However, the lifting of all restrictions on live events remains heavily contingent on the Events Research Programme. Despite initial positive data from some settings, we are not confident the pilots will deliver the evidence needed in time to lift all restrictions on live events from 21 June. By the Minister’s own admission, festivals are unique settings and yet they were initially overlooked in the first tranche of pilots. We strongly welcome the decision, following our questioning of the Minister, to conduct a festival-type pilot in early May; however a one-day event for 5,000 people does not capture the full range of UK festivals and further pilots may therefore be needed.

37.While our preference remains for a comprehensive sector-wide insurance scheme, we recommend, in the absence of such a scheme, a targeted intervention that extends the Events Research Programme and associated liabilities to a range of additional pilot events, including festivals of different sizes and genres, across the UK during the rest of 2021.