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As many as 92% of independent festivals could go out of business this summer without government action, says AIF

By | Published on Wednesday 13 May 2020


The UK’s Association Of Independent Festivals has said that as many as 92% of the festival companies in its membership could go out of business as a result of the COVID-19 shutdown without “meaningful action” by government to protect them.

The economics of festival promotion are tricky at the best of times, of course, and profit margins are usually very tight. Any sudden shock to the system can cause festivals to collapse, and the entire 2020 summer festival season being cancelled – as it looks increasingly likely that it will be – is one hell of a shock to the system.

Predicting that at least 90% of UK festivals will not go ahead this year, the AIF says that the sector at large is facing having to pay out refunds of up to £800 million. Its members, it adds, have – on average – unrecoupable costs of £375,000, with 98.5% not covered for a COVID-19-related cancellation by their insurance. Those festivals that do survive expect to have to make 59% of their staff redundant after September this year.

These challenges are exacerbated by the fact that many festival companies are currently “falling between the cracks” of government financial support schemes.

“While the government has been receptive to AIF’s counsel, it has not taken meaningful action to protect our sector”, says AIF CEO Paul Reed. “Single event festival companies are seasonal businesses. They need urgent support now and ongoing support after lockdown ends and restrictions are eased”.

For his members, he adds, the COVID-19 shutdown “is not a temporary shutdown of business, it is an entire year of income and trade wiped out. If support is not offered throughout the autumn, then the sector will face widespread job losses that will seriously inhibit its ability to deliver events in 2021”.

“There is no safety net for independent festivals, many of which have fallen between the cracks of current government support measures such as loans and grants”, he goes on. “For example, 0% of AIF members have been able to successfully access the Coronavirus Business Interruption Loans Scheme”.

The loss of many – potentially most – independent music festivals would obviously be hugely damaging for the music industry and the UK economy at large.

Reed states: “UK festivals are not only an intrinsic, defining part of British culture but also an economic powerhouse that generates hundreds of millions for the economy – we urge government to recognise them as such”.

He concludes: “Next year’s festival season will hopefully offer much needed relief after a very difficult time for the country. But, for now, these independent businesses need to survive. Otherwise, every year from now could be a fallow year for independent festivals, for the emerging artists they provide a platform for, and the local economies across the UK that they generate income for”.

AIF is calling on the UK government to make a distinction between ‘retail’ and ‘seasonal’ businesses in its support schemes. As part of this, it wants the existing furloughing and self-employment support schemes extended for festival businesses until the festival industry can get to the planning and sales stage of 2021 events.

It also calls on government to recommend that local authorities automatically rollover to 2021 any event licences issued this year to festivals that were then cancelled as a result of COVID-19 and to instigate a VAT holiday on ticket sales for eighteen months.

It also wants “clear guidance and timelines” on when large-scale events will be able to operate again, assuming that festivals could be one of the last categories of businesses to no longer be subject to COVID-19 shutdown restrictions.

The UK Live Music Group, of which AIF is a member, has also called for specific government action to support its sector. Citing various stats from the live industry – including some of the AIF stats – it said that thousands of jobs could be lost and £900 million in economic value wiped out if bespoke measures are not put in place by government to support venues and promoters.

Meanwhile UK Music – of which the UK Live Music Group is a member – has requested that the government pull together a specific music industry taskforce to assess the specific challenges faced by music businesses and to consider ways that those businesses can be supported as they navigate the COVID-19 shutdown and the painfully slow return to normal.