Business News Legal Live Business Top Stories

AIF chief calls for government support for festival sector facing “perfect storm” in 2022

By | Published on Tuesday 15 February 2022


The chief of the UK’s Association Of Independent Festivals has warned that – while it’s hoped a full season of music festivals will be possible this year – the sector is facing significant challenges. In fact a supply chain crisis, workforce shortages, rising costs and the effects of Brexit could create a “perfect storm”.

Paul Reed was speaking at his organisation’s Festival Congress event in Bristol earlier today. After two years of COVID-caused cancellations, the independent festival sector is hopeful that all if its events will be able to go ahead this year. However, Reed said, despite that optimism, further government support will be required for the industry to successfully return to normal post-pandemic.

AIF estimates that the operational and infrastructure costs of staging festivals could increase 20-30% this year. That’s due to the increased costs of labour, staffing, materials and transport. Those cost increases are way beyond current inflation rates, even though those are currently very high.

And promoters won’t be able to simply pass on those cost increases to consumers, partly because doing so could negatively impact on ticket sales, but also because many festivals will be honouring tickets already bought for cancelled 2020 and 2021 editions at their 2022 events.

There also remain issues around getting cancellation insurance for festivals. The government was meant to have helped in that regard via its state-backed insurance scheme for large-scale events, but Reed confirmed that that scheme isn’t fit for purpose and therefore festival promoters are not utilising it.

In terms of what government could be doing to support the sector – other than sorting out the useless insurance scheme – Reed called for the current reduced VAT rate on tickets to be continued beyond the end of March, and also for some sort of state-backed loan scheme for suppliers to alleviate some of the pressures and encourage investment in the festival supply chain.

Said Reed: “The UK festival industry is a powerhouse, contributing £1.76 billion in gross value added to the UK economy and supporting 85,000 jobs. The cultural and wellbeing benefits of festivals cannot be measured. We know they are profound, and the absence of festivals has been felt keenly by artists, the wider supply chain and of course audiences”

“We are facing a perfect storm in many ways”, he told his audience of festival promoters. “I’ve spoken with many of you in the last few weeks about supply chains, loss of skilled workforce, 20-30% increase in costs across the board and a government-backed insurance scheme that simply isn’t fit for purpose despite our best efforts”

“We may be emerging from the shadow of the pandemic in the UK, but this year will not be a case of ‘back to business as usual’ without critical support for festival organisers. That’s why we’re calling on the government to aid our recovery and maintain the current reduced 12.5% rate on tickets beyond the end of March, as well as looking at some form of government-backed loan scheme for suppliers to alleviate some of these pressures and encourage investment in the festival supply chain”.

“AIF fought hard to represent the needs of independent festival operators during the course of the pandemic and made sure your voices were heard in the corridors of power”, he concluded. “We will continue to do so during what is still a very challenging time”.

Reed’s outline of the challenges facing the festivals sector – and the need for more government support – follows similar concerns raised by the NTIA about night-time economy businesses earlier this month.

Elsewhere at the Festival Congress today, it was announced that Jim Mawdsley is stepping down as Chair of AIF later this year. Recruitment of a new Chair will begin next week.