The government’s £1.5 billion funding bailout for the creative industry could help stave of upwards of 100,000 job loses in London.
That’s based on a recent report that had been predicting that London’s creative industries could be lost nearly 110,000 jobs due to the coronavirus pandemic this year.
The report, The Projected Economic Impact of Covid-19 on the UK Creative Industries, projects that the creative sector will be hit twice as hard as the wider economy in 2020, with many creative sub-sectors expected to lose more than half their revenue and over half of their workforce.
Creative industries contributed nearly £112bn to the UK economy in 2018, the most recent year data is available, and had in pre-virus times been expected to reach £122 billion this year.
By that calculation, a £1.5 billion in funding for the creative arts industries seems almost a bargain.
However, thanks to the shut-down and later after opening, limits on visitors, three-quarters of venues are projecting income this year to be more than halved compared to last year, with 38% projecting a loss of three-quarters of their income.
That puts the potential loss in revenue considerably higher than the bailout offered by the government.
It’s also being targetted at the “crown jewels” first, with secondary support for the smaller venues, and currently, limited direct support for freelancers and contract employees.
Across the UK, despite the job retention scheme, due to social distancing rules, the report projects that 119,000 permanent creative workers will be made redundant by the end of the year. The impact on employment is set to be felt twice as hard by creative freelancers with 287,000 freelance roles also lost.
Of the 406,000 creative jobs that could have been lost, nearly half (47%) were projected to be in London and the South East.
Roughly one in six jobs in London’s creative markets could be lost — just under 110,000 people being made redundant.
It’s currently unclear how many of those job loses will now be averted.
Due to the margins that most venues operate on, needing typically upwards of 80% capacity to be sold in theatres for example just to break even. At the moment, social distancing means that most seated venues will struggle to fill 30% of their seats.
Social distancing even when they can open means that most venues will run at a loss, or as the Southbank Centre recently warned, may not bother opening at all.
Some other venues are expected to be less badly hit, such as museums and galleries, they will still have fewer visitors but are able to spread out of a wider floorspace and retain some income from paid exhibitions. Despite that museums will be hit hard by the loss of income from cafes and shops.
The impact is also likely to last far beyond 2020, even if a vaccine is developed and life returns to some semblance of normality, simply due to the lengthy time it takes to prepare next year’s exhibitions and theatre plays — all of that work being effectively on hold at the moment.
The bailout, while welcomed by the industry may be enough to stave off disaster this year, but not next.