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The effects of Covid have created extensive issues that have decimated the creative sector and it now needs to be supported by the upcoming Budget. However, Covid has also scaled digitalisation across the UK and may prompt Chancellor Rishi Sunak to drive more funding towards the roll out of digital connectivity.

The creative sector is predominantly made up of freelance artists who have been badly affected because of lockdown measures. Many freelancers have been unable to find work due to cancellations of events, with some forced to retrain to find employment.

There have also been stark criticisms directed towards the Government as the Self Employment Income Support Scheme (SEISS) did not cover those with jobs that involve moving from freelance contract to freelance contract on a short-term basis. This includes many people who work in creative industries, such as musicians. The Treasury Committee’s third report on the economic impact of coronavirus: ‘Gaps in Support and Economic Analysis’ stated that ‘ONS data indicates that 3% of all self-employed in the UK have become self-employed since April 2019, which, roughly estimated, suggests that around 150,000 newly self-employed are unlikely to be eligible for support under the SEISS.’

It is therefore essential that the upcoming spring Budget tackles this issue and in the words of Mel Stride MP: ‘the Chancellor must not forget those who have fallen through the gaps around previous support packages and must provide the necessary workforce support measures and economic plan for the self-employed.’

Another issue within the creative sector has been the complete cancellation of festivals and gigs. The flagship economic study by UK Music by Numbers revealed that before COVID-19, the UK music industry contributed £5.8bn to the UK economy, with live music making up £1.3bn of this and contributing to the employment of 34,000 people. As all these events were cancelled last year, this left a huge financial gap in takings for the industry, and prospects for events to go ahead this year look increasingly unlikely.

In a recent DCMS Committee evidence session, which focused on the future of UK music festivals, witness Sacha Lord, co-founder of Parklife and The Warehouse Project, spoke about necessary Government intervention that is needed for events to restart and go ahead this year, including the need for a Government-backed Coronavirus cancellation insurance scheme, an extension to the VAT rate reduction on tickets carrying on at 5% for the next three years, extension on business rate reliefs, and a ‘more nuanced, specified furlough scheme for specific industries, for festivals’ until events are fully running with 100% capacity.

These are all measures that could be introduced in some capacity in the upcoming Budget.

Committee chair Julian Knight has also called for the Government to address these issues, where he has emphasised the need to introduce a Government-backed Coronavirus cancellation insurance scheme, saying: ‘Insurance must be the first step in unlocking the huge contribution that festivals make to our economy, protecting not only the supply chains, but the musicians who rely on them for work’, and that ‘the industry says that without Government-backed insurance, many festivals and live music events just won’t happen because organisers can’t risk getting their fingers burnt for a second year.’

The upcoming spring budget provides the Government with the perfect opportunity to introduce this much needed measure.

Both of these issues have been highlighted by the Creative Industries Federation, which has set priorities it expects from the upcoming spring budget that include: extending the Self-Employed Income Support Scheme for as long as restrictions on work remain, urgently plugging the gaps in support for freelancers, extending the Job Retention Scheme, temporary business loans, grants and rate reliefs across all UK nations for as long as restrictions remain, introducing a Government-backed insurance scheme for live events, extending the VAT rate reduction on tickets beyond March 2021 and repurposing the Tradeshow Access Programme to support virtual, not just physical, events.

It also expects the Budget to reevaluate and boost funding towards digital connectivity, especially as COVID-19 emphasised the need to boost digital connectivity. The pandemic has forced the workforce towards remote working and has digitalised many aspects of society.

Focusing on digital connectivity, it is widely expected that the upcoming budget will replace the current Rural Gigabit Connectivity Programme (RGC), which is due to end by 31 March 2021, with a new progamme and fresh funding.

The RGC was launched in 2019 and focused on helping properties in rural locations to access faster broadband. A main part of this was a voucher scheme that, as defined by Building Digital UK, allowed ‘community and small to medium sized businesses to aggregate vouchers together in group schemes to fund the cost of gigabit-capable broadband to their community.’

DCMS has reported that an independent review revealed that ‘The £2.6bn Government scheme to roll out superfast broadband to ‘commercially unviable’ parts of the UK sparked a surge in home values of up to £3,500, according to a new report, and more than 96% of homes and businesses can now access superfast broadband.’

It is expected that a successor programme will be introduced to continue progess on the Government’s £5bn UK Gigabit Broadband Programme, which aims to provide ‘gigabit-capable’ network coverage to a minimum of 85% of society by the end of 2025. DCMS also recently published the Planning for Gigabit Delivery in 2021 report, in which it stated that ‘following the success of the Gigabit Broadband Voucher Scheme, we’re keen that we continue voucher-supported delivery during 2021’, and ‘the voucher team will continue to work with suppliers and communities to transition smoothly from the current to the new voucher.’ The question remains of how much funding will be made available for the new voucher, expected to be announced in next week’s budget.

The closures of gyms and leisure centers because of COVID-19 has become a worrying issue that also needs to be addressed. This issue has been highlighted by Rebecca Passmore, the managing director of PureGym, at a DCMS committee oral evidence session. She said: ‘Gyms have had no income for 34 of the last 54 weeks, we have had no revenue coming in. We haven’t been able to do click-and-collect or takeaways. It’s clearly taking its toll on operators. Balance sheets are being pushed to their limits.’

The Guardian reports the measures representatives from gyms and leisure centers are seeking from the Government to help them recover and survive from the effects of coronavirus. The Budget could include these measures, which ask the Government to apply ‘the same VAT rules to the physical active sector as it does the hospitality industry, which has had to pay the Government only 5% of the 20% VAT it has collected in lockdown’, and calls for the Government to ‘extend the rent holiday and to also legislate so that the burden of rent was shared between landlord and tenants during the lockdown.’

The BBC has also reported that ‘A coalition of athletes, celebrities and health bodies have written to the prime minister asking for the “fullest possible support” to help sports and exercise facilities survive the pandemic.’ Overall, there is a clear need and expectation that the upcoming budget will outline plans and funding towards the survival and recovery of gym and leisure centers.

It is clear that digital, cultural and sport sectors are among the most adversely affected by COVID-19 and the upcoming budget is expected to outline plans to resolve these issues, and support Covid recovery and job protection. At the same time, the acceleration of digitalsation within the UK because of COVID-19 could see accelerated measures introduced to boost digital connectivity.

Vuelio Political clients will receive the Budget Summary on 3 March. 

Much has changed since Chancellor Rishi Sunak delivered his last Budget almost a year ago, but one thing which hasn’t is the need to tackle climate change and to protect the environment, both in the UK and internationally.

When the Treasury announced that 2021’s Budget would be on 3 March, it said that it would ‘set out the next phase of the plan to tackle the virus and protect jobs’. As the widespread calls, both from within the Government and from a wide variety of interested parties, to ‘build back better’ and deliver a ‘green recovery’ show, these two aims can be delivered in parallel.

So far, the Government has released some of the building blocks to inform and help deliver these aims. We’ve had the Ten Point Plan for a Green Industrial Revolution, the National Infrastructure Strategy, the Energy White Paper, the interim report of the Treasury’s Net Zero Review and the Dasguta Review on the Economics of Biodiversity. More strategies are promised, digging into some of the toughest areas of decarbonisation: heating, transport, energy-intensive industries. With the UK hosting COP26, the UN’s climate change conference, this year, the Government will want to show that it is leading by example.

But to deliver on these strategies, the Chancellor will need to pull some of the levers at his disposal. To look at it in the most simplistic way, the Government has two ways of doing this: spending and tax. Sunak could announce investment in technologies and projects to deliver a ‘green recovery’ or changes in taxes to incentivise others to do so, such as new reliefs. Equally, he could announce increases or adjustments to taxes to penalise those responsible for emissions and environmental damage, embracing the ‘polluter pays’ principle.

One tax which could rise is fuel duty. The Daily Telegraph recently reported that Conservative backbenchers believed that an increase is ‘inevitable’. A ‘Northern Tory’ told the paper that ‘the Government can wrap itself up in the green cloak of COP26 and the British public might not love it, but they will stomach it’. However, ending the decade-long freeze would not be without political problems. The Sun, which strongly backed the freeze, has already mobilised against the change, enlisting backbenchers Robert Halfon, who said ‘a fuel duty increase would level down – far from building back better and would damage the foundations of economic recovery’, and Craig Mackinlay, who claimed it would be ‘bad for the economy, bad for business and bad for jobs’.

The Times has reported that the Government has been considering options for new carbon taxes, with departments ordered to set ‘prices’ for emissions from all parts of the economy as part of a plan to ‘implement some form of carbon pricing’ in the next decade. This would form part of a strategy to ‘deliver a carbon price for the whole economy’ ahead of COP26. However, this plan has been blocked by Boris Johnson according to the Daily Mail.

BDO suggests that further changes to taxes linked to climate and the environment could be announced, such as capital allowances ‘that support the Government’s carbon reduction agenda’, new taxes on more single-use items such as coffee cups, or higher VAT rates for ‘environmentally damaging goods and services’.

If the Government is minded to go down this route, it would do well to examine the findings of a recent National Audit Office report that concluded the Treasury and HMRC ‘tend to focus more on the revenue that environmental taxes raise rather than the environmental impact they achieve’ and ‘do little’ to identify measures ‘which impact on Government’s wider environmental objectives but which are not recognised as environmental in nature’. If the Government wants to use the tax system to incentivise environmentally beneficial behaviour and penalise irresponsible activity, it needs to be sure that it’s doing so in an effective way.

Of course, another way in which the Government can act is for Rishi Sunak to produce the national chequebook. As the Institute for Fiscal Studies notes, ‘we need a plan for measures that increase the productive capacity of the economy and help steer and ease the transition to a new normal’ which should include ‘investments in physical and digital infrastructure, training, and science’ to help ‘achieve goals such as reaching Net Zero by 2050’.

The use of Government investment to deliver this green recovery is being advocated by business and unions. The TUC is continuing to push its plan to create 1.24m jobs in green infrastructure by bringing forward at least £85bn of infrastructure investment. This would see investment across a range of industries, including energy, land, buildings, transport, waste, manufacturing and digital, delivering a range of positive outcomes both for the environment and the economy.

The CBI has recommended that the Government commit to deliver seven more gigafactories by 2040 (these build batteries for electric vehicles), ensure that private sector investment is crowded-in by the new National Infrastructure Bank and invest in sustainable aviation fuels, as well as introduce reliefs for businesses which invest in property and machinery energy efficiency.

The Institute for Directors has advocated the creation of a ‘new digital and green Recovery Credit incentive for SMEs’, helping to support their investment in digital and green technologies, noting that at the moment British small businesses ‘tend to lag peer nations when it comes to adopting best practice’. It also wants a ‘retraining Recovery Credit incentive for SMEs’, which would especially focus on digital and green skills.

One area to particularly watch out for will be the future of the Green Homes Grants. Launched with much fanfare by Sunak as part of his Plan for Jobs last summer, recent news has not been encouraging. The grants were advertised as being worth £2bn, allowing homeowners and landlords to apply for vouchers for energy efficiency improvements. However, 95% of the £1.5bn for householders has not been spent and, while the grants have been extended until March 2022, the funding is not being rolled over to the next financial year. Instead, £320m will be available from March – a much smaller sum.

Shadow Business, Energy and Industrial Strategy Ed Miliband said that the Government was ‘denying homeowners the energy improvements they need, denying installers the work they need and denying the country the green transition we need.’ The Government blamed the low take-up on ‘an understandable reluctance on the part of the public to welcome tradespeople into their homes.’ If Sunak does want to revisit the design or funding of the scheme, the Budget would be a good opportunity.

With so much happening in the environmental and climate policy landscape in 2021 – including another budget, the UK’s Sixth Carbon Budget – it would be a missed opportunity if the Chancellor didn’t take the Budget as an opportunity to ensure that the Government’s tax and spending decisions were in line with its ambitious climate ambitions.

Vuelio Political clients will receive the Budget Summary on 3 March. 

The Government laid out wide ranging reform of the health and care system yesterday. The White Paper ‘Integration and Innovation’, marks a structural shift away from the coalition Government reforms of 2012, and sets out ambitious legislative proposals for a new Health and Care Bill. 

The main aims of the proposals are to integrate healthcare systems, reduce bureaucracy and strengthen accountability in the sector. Announcing the plans, Health and Social Care Secretary Matt Hancock said: ‘Even before the pandemic, it was clear that reform was needed to update the law, to improve how the NHS operates and to reduce bureaucracy… All parts of the system told us that they want to embrace modern technology, to innovate, to join up, to share data, to serve people and, ultimately, to be trusted to get on and do all that so that they can improve patient care and save lives.’

The plans propose that Integrated Care Systems (ICS) are rolled out across the country, bringing together NHS organisations, local government and wider partners at a system level. In order to increase collaboration, bureaucracy will be reduced and there will be greater flexibility for the workforce with increased data sharing mechanisms. Aiming to improve accountability and public confidence, the Secretary of State will have greater powers of intervention, including over a newly merged NHS England and NHS Improvement organisation.

Response to the proposals is mixed; although plans to integrate the healthcare system are largely positive, there is some concern over moving power away from NHS England to central Government. Additionally, with the health system still battling an acute wave of the coronavirus pandemic, some are concerned that now is simply not the right time for reform.

Shadow Health and Social Care Secretary Johnathan Ashworth welcomed integration plans, but asked for greater clarity on how the new structures will be governed. He called the decision to give more control to the Government a ‘power grab’ and suggested that changes to competition rules would leave the door open for ‘institutionalised cronyism at the top’.

NHS Providers suggested that the proposals provide an ‘important opportunity to speed up the move to integrate health and care at a local level’, but called for greater detail on the Secretary of State’s new powers over NHS England.

NHS Confederation called the reforms ‘vital for improving patient care’ after the 2012 reforms have ‘largely failed’.

Lou Patten, CEO of NHS Clinical Commissioners and NHS Confederation ICS Lead, called the decision to establish ICSs across the country a ‘logical step’ to build on the progress seen from the past few years. He called for greater detail on how the new systems will be governed, highlighting that retaining the expertise of senior staff throughout the restructuring process is essential.

Alzheimer’s Society said that with the pandemic exposing how ‘truly broken’ the social care system is, greater integration between health and social care is a ‘good step forward’. It argued that any reforms should come in conjunction to a social care system ‘overhaul’.

The Health Foundation also welcomed the decision to increase collaboration between services, suggesting that the proposals could bring ‘real benefits’. However, it argues that with the NHS facing huge challenges due the pandemic and rising waiting lists, a reorganisation of the health system could cause ‘distraction and disruption’. Furthermore, the decision to increase Government power is ‘politically driven’, it argued that ‘the Government’s handling of Covid-19 is no advert for more ministerial intervention in the health system’.

The King’s Fund also welcomed greater collaboration across the heath and care sector. Richard Murray, Chief Executive of The King’s Fund, said: ‘These new plans could give the NHS and its partners greater flexibility to deliver joined-up care to the increasing numbers of people who rely on multiple different services.’

However, it worries that under the new proposals, the day-to-day clinical and operational independence of the NHS will be diminished, and argued that devolving greater power to NHS England was one of the ‘successes’ of past reforms.

In a similar vein, the Institute for Government’s Nicholas Timmins has said greater ministerial control ‘threatens to take the NHS back to the wrong sort of future’. He suggests it could lead a ‘constant chopping and changing of goals’ and less public pressure from within NHS England, which would ultimately be to the detriment of long term performance.

Vuelio Political clients received their copy of the white paper summary yesterday. Find out more about our political products and services.