UK Association Of Independent Festivals Issues ‘Final Countdown’

In light of the UK’s upcoming budget, the country’s association representing independent festivals, AIF, is asking for government-backed insurance as well as VAT reliefs in order to save a sector that that generates £1.76 billion in gross value added per year and supports 85,000 jobs.

If both reliefs aren’t provided by end of March, “independent festivals could be forced to cancel their 2021 events,” an AIF statement reads.

The association “warns the Chancellor: this is the final countdown for many festival organisers, who will need to decide whether to commit significant costs by the end of the month if they are to stage events this year.”

It’s been a theme in the way governments across Europe have been acting towards live events, festivals in particular: a lack of understanding for the amount of preparation it takes to pull off an open-air gathering with an international lineup, as well as the huge amounts of money that need to be deposited long before the event actually takes place.

The UK prime minister’s current roadmap out of lockdown would, in the best-case scenario, would allow “performances and sporting events in outdoor venues with a capacity of 4,000 people or half-full (whichever is a lower number)” to return no earlier than May 17. 

“In the largest outdoor seated venues, where crowds can be spread out, up to 10,000 people will be able to attend (or a quarter-full, whichever is lower),” the government currently states.

In case the COVID numbers develop accordingly, the UK plans to lift all restrictions from June 21.

While that date would be just in time for peak festival season, promoters still need guarantees that their losses will be compensated, in case the roadmap gets delayed.

In an AIF member survey, 92.5% of respondents confirmed they cannot stage events without insurance and described insurance measures as vital not optional.

 

AIF analysis suggests that, for a festival taking place in early July, an estimated 40% of total costs will need to be paid before June 14 – the date when Government will make a decision on the final step of its roadmap.

 

However, 20% of costs are payable in April. This includes “not only artist, production and infrastructure deposits, but costs that are essential to events being allowed to go ahead, such as policing, medical provision and licensing.”

 

The expected total cost of staging a festival, based on an AIF member survey, ranges from £130,000 ($180,000) to £12.4 million ($17.3 million), with an average cost of over £6 million (£6,350,000 or $8.8 million).

 

What is more, as the AIF points out, “even if festivals sell out well ahead of time, many organizers cannot draw down revenue from ticketing companies, as it remains ring-fenced to be paid out post-event or refunded to customers if necessary. 

“It remains an enormous risk for any independent festival to proceed and incur such costs up to June 14 without insurance.”

The entire festival supply chain could be kickstarted by a government-backed insurance scheme. Germany, Austria, Norway and the Netherlands are some of the European governments that have come up with some form of compensation for promoters, in case government mandates stop their events from going ahead,

The UK Government has so far only provided such a scheme for film and TV productions.

In terms of VAT, which the UK government reduced to 5% last July, festivals have only very recently been able to take advantage of the measure, as this is their first sales period of the Covid crisis.

 

AIF is reiterating calls for a three-year extension to the reduced rate, to support the long-term recovery of the sector.   

 

AIF CEO Paul Reed commented: “The Prime Minister has set out a roadmap and a ‘no earlier than’ date for festivals, and audiences have responded, demonstrating a huge appetite to be back in the fields this summer. But we need Government interventions on insurance and VAT before the end of this month when festivals will need to decide whether they can commit to serious amounts of upfront capital.

 

“Now that we have a ‘no earlier than’ date, insurance is the last remaining barrier to planning. We know that Government is aware of the insurance issue and AIF has provided evidence and data to support the case. Having injected huge consumer confidence, Government should intervene at this stage and ensure that our culture-defining independent festivals can mobilise and plan for this summer. With the cut-off point for many organisers at the end of the month, this really is the final countdown for many businesses.”