Covid-19 and the theatre industry

By Kate Norris solicitor and expert in Irwin Mitchell's Media & Entertainment team.

Rishi Sunak has published his hotly anticipated 2021 budget. Many businesses have suffered through the pandemic, but few have been as hard hit as the arts sector. The practical and commercial implications for the sector are going to be wide-ranging.

If you can’t adapt your business to work in line with social distancing measures, you’re left to do everything remotely. Streaming theatre performances and releasing recordings has been one method adopted by the campaign “The Show Must Go On” created by the Theatre Support Fund which streams shows for 48 hours, encouraging viewers to donate to a fund to aid actors and theatres alike. The fund was necessary as over the past year, theatres, actors and the entertainment industry as a whole has been left to languish with little support.

The provisions of the budget which jump out as relevant to arts practitioners include the following:

The Community Ownership Fund

The government will create a new fund totalling £150m to benefit “local facilities and amenities”. From summer, community groups will be able to apply for up to £250,000 matched funding to help buy assets to run as local community owned businesses. The issue with this is many local theatre groups’ coffers have been devastated by insurance policies refusing to pay out for missed performances. Being able to apply for this funding is a helpful safety net for local theatres that have managed to survive with some degree of their savings intact, but is specifically for purchasing assets. This fund can’t be used for renting costumes or for paying salaries. Further, if you’re an arts organisation you’ll also be competing with local pubs, sports clubs and post office buildings to get to the front of the queue.

In practice, the funds matching requirement will be a deal breaker in a lot of cases. Under usual circumstances, the Arts Council only requires a 20% contribution for artistic grants and is currently considering applications where the creative team is unable to front up any cost due to the losses of the past year, as outlined below.

The Kickstart scheme

The Kickstart scheme clocks in at £2b and aims to provide young people at risk of long-term unemployment with fully-subsidised jobs to give them experience and skills. It’s similar to furlough on the surface but is age-gated (it only covers those from 16-24 on Universal Credit), and aims to get workers back to working rather than simply retaining their job without working. Further, the funding available will only cover the applicable National Minimum Wage rate for 25 hours a week.

On that maths if you assume a 40 hour working week is fairly typical, this means that the government will only fund young people to work at the lowest rate possible for 63% of the average working week. In effect, whilst Mr Sunak has superficially inflated the NMW base rate by 19p, he is quietly reducing the hours the poorest and youngest arts employees are able to be paid under the guise of encouraging employers to take on new staff.

To date, 120,000 vacancies have been created by the scheme. However it should be noted that this scheme is not exclusive to the arts, so these figures are across all of the applicable sectors.

Culture Recovery Fund Grants

Whilst the above options seem to be more token gestures than anything else due to the list of prerequisites, the injection of £300m to the Culture Recovery Fund is the most interesting update and offers the most beneficial support package. According to the Arts Council website:

This fund should be used to cover costs that will help organisations remain open or to reopen/restart their operations, where appropriate (in line with Government’s advice on Covid-19). 

If, for example, reopening under social distancing isn’t possible or does not represent a value for money approach, grants can be used to support organisations to operate on a sustainable, cost-efficient basis – so that they can reopen at a later date.

…

We do not expect this funding to be used to experiment, research or develop new work that is not directly essential to your organisation remaining financially viable. This funding is not intended to enhance your cultural offer but instead to ensure that you are not at risk of failure before 31 March 2021.

In short, existing companies should take solace in this new injection of funding, but don’t expect any support for devising new work. For new works, you might be eligible for a National Lottery Project Grant instead.

Concluding thoughts

The budget does offer some hope for arts practitioners, but does need to be taken with a pinch of salt. There are restrictions which impact the extent to which the funds are accessible enough to be useful for their intended purpose: shoring up and protecting the sector. Nonetheless, the expansion of the Culture Recovery Fund offers some hope. Hopefully the Arts Council will be able to mobilise quickly to advise creatives of a timeline for any new applications. The speed of this turnaround will be key as on the whole, arts practitioners have been left to navigate the legal minefield caused by the pandemic. Typical cost-incurring areas include:

How do I refund my audience for a live event?

How do I make sure that my contracts have sufficient protections in place if we’re not legally allowed to perform?

What are “act of God” (also known as force majeure) clauses?

What commercial risks could we minimise?

What type of insurance coverage do I need?

Irwin Mitchell’s commercial team has a strong practice supporting creative industries with practically grounded advice. These types of issues can be addressed through careful planning, offering arts practitioners and venues with as much protection as possible during this unpredictable and unstable time.

Kate Norris has recently joined Irwin Mitchell’s Media and Entertainment team. In her spare time, Kate has written two original musical theatre productions. In addition to her experience dealing with live productions, she professionally recorded an EP album during her postgraduate studies with the assistance of a grant from the Andrew Lloyd Webber Foundation. We are delighted that she has joined our team and welcome her practical outlook on the theatre world.