How the budget will affect the arts industry

Equity’s new Policy Officer Liam Budd analyses how the budget will affect Equity members and explains what action the union is taking. 

Today (27 October) in Parliament the Chancellor set out the UK government’s spending priorities over the next three years, as well as the funding settlements for the devolved nations. Ahead of this budget, Equity called on the UK government to protect the creative workforce and put our industry at the very heart of its Covid-19 recovery strategy. Unfortunately, the Chancellor’s budget falls short of our demands and risks exacerbating the creative sector’s ongoing problem of elitism.

Read Equity General Secretary Paul W Fleming's response to the budget

How will the budget affect Equity members?

Wages

  • The government announced an increase to the UK’s minimum pay rates as part of its strategy to end low pay. For example, the National Living Wage for over-23s will rise to £9.50 an hour, an increase of 6.6% on the current £8.91 per hour.

While any increase is welcome, this will not come into effect until next spring. It is also widely accepted that this will not compensate for the financial burdens on workers in the form of tax rises, universal credit cuts and higher energy bills.

Taxation

  • Despite our campaigning efforts, the government reconfirmed its commitment to increase National Insurance Contributions (NIC). From April 2022, NICs for those in employment will increase by 1.25% to 13.25% and NICs for the self-employed (Class 4) will rise from 9% to 10.25%, affecting monthly incomes in both cases.

We warned the government that this measure would disproportionately affect lower income workers, those in insecure work as well as young people. At the same time, the government has announced tax cuts for banks, frequent flyers and champagne.  We will continue to lobby the government to reverse the NIC increase and instead investigate counter-policies for raising funds for the NHS and social care from those who have profited from the pandemic.

Welfare

  • Despite pressure from Equity and other campaigning bodies, the government has refused to reinstate the £20 uplift to Universal Credit.

This was despite Equity warning that 53% of respondents to our recent survey would experience financial hardship and 41% would not be able to meet housing and other essential costs with the removal of the uplift.

  • The government has however announced a concession by reducing the taper rate - the amount of UC withdrawn for every pound someone earns - from 63p to 55p.

It would mean up over two million working benefit claimants would keep 45p, rather than 37p, of every extra pound they earn through work. This measure will be introduced before 1 December 2021 and will support working families. However, Equity members who are not able to work will not benefit.

Arts and culture (England only)

  • The UK government has announced a real terms spending increase for every department. This includes the Department for Digital, Culture, Media and Sport who oversee culture spending in England and will see it’s settlement increase by £0.6 billion by 2024-25.
  • Cultural and heritage institutions in England, such as museums and galleries, will receive £850m of extra funding to redevelop and refurbish their sites.
  • The government has also extended tax reliefs for the culture sector – including theatres, orchestras, museums and galleries – by doubling the rate from today until April 2023, which will then return to normal levels in 2024.

These measures are necessary. However, once again the focus of government culture spending is largely on buildings instead of the workforce. It is important to highlight that UK culture funding falls way behind European levels. According to Eurostat Statistics, UK spend on ‘cultural services’ as a percentage of GDP was 0.2% in 2019, which ranked the second lowest rate for all European countries. The European average was 0.5%.

Education and skills (England only)

  • The government has announced that schools in England will get an extra £4.7bn of funding by 2024-25, which will restore per pupil funding to 2010 levels. However, there is no sign of the government’s manifesto commitment for a £90 million year Arts Premium for schools, which was scheduled for September 2021 and then delayed.

After over decade of austerity, this sizable funding package for schools is encouraging. However, this sits within the wider education policy landscape, which has increasingly focused on STEM subjects, alongside accountability measures that only value English Baccalaureate subjects. This has led to a narrowing of our curriculum and declining provision of arts education across our education system. Since 2010 the number of all arts GCSE entries declined by 38% and Drama entries have fallen by 30%. The government is also moving ahead with plans to cut funding for art and design courses by 50% across higher education institutions in England.

  • The government announced a £3.8bn spending package to boost technical education and skills training as part of their efforts to support more people into “high-skilled industries”. This includes £1.6bn to roll out T levels (which are new courses equivalent to 3 A levels).
  • As part of this package, apprenticeship funding will increase by £170 million to £2.7 billion in 2024/25.

Students can currently take a T level in Digital Production and Design. New subjects such as Craft and Design and Media, Broadcast and Production will be available from September 2023, which we hope will support more people into the creative industries. 

While more apprenticeship funding is welcome, we need a bespoke approach to increase the number of paid creative apprenticeships. ScreenSkills estimated there are only a quarter as many creative industries apprentices as there could be resulting in £55 million of wasted annual creative apprenticeship levy payments.

How can the government deliver on its commitment to level up opportunities and break the creative class divide?

The government has allocated the first round of successful bids for the Levelling Up Fund, with 105 projects seeing an upgrade to local infrastructure. But if the government was really serious about these commitments then they would look beyond capital investment and adopt Equity’s radical plan for arts and culture. This includes Equity’s demands for investing in arts education for all and providing a meaningful safety net for freelance workers. The Government must also recognise that the lives of artists and arts workers of all disciplines is inherently precarious. Equity will continue to campaign for the introduction of a minimum income guarantee for creative workers as a long-term way to remedy low and no pay, and make our industry more accessible.