Debate on spending of DCMS on support measures for the DCMS sectors during and after the COVID-19 pandemic, House of Commons, 8 October 2020

The Government made £3.2 billion worth of emergency funding available to councils to address the immediate pressures of the COVID-19 crisis. However, this funding was predominantly targeted towards direct frontline issues such homelessness and supporting the vulnerable. The culture, tourism and support sector still face’s significant funding challenges, despite the Government’s £1.57 billion support package for the cultural sector.


Key messages

  • Councils play a crucial role in the culture, tourism and sport sectors. They spend over £1.1 billion on culture and over £1 billion a year on sport, leisure and green spaces, parks and playgrounds. The sector also makes a significant contribution to council budgets through earned income, business rates, fees and charges. These sectors can have a key role in helping councils to deliver the recovery at a local level and need investment now.
  • The Government made £3.2 billion worth of emergency funding available to councils to address the immediate pressures of the COVID-19 crisis. However, this funding was predominantly targeted towards direct frontline issues such homelessness and supporting the vulnerable. The culture, tourism and support sector still face’s significant funding challenges, despite the Government’s £1.57 billion support package for the cultural sector.
  • The promise to match 75 per cent of lost income is not applicable to the almost 80 per cent  of the leisure services contracted out to charitable trusts or “for profit” providers, leaving these services requiring an immediate investment of at least £700 million from Government if communities are to retain their leisure centres.
  • In addition, research prior to the pandemic showed nearly two thirds of leisure facilities are more than 10 years old and require refurbishment and nearly a quarter of all sports halls and swimming pools have not been refurbished in more than 20 years, with many older properties at risk of immediate closure. A £500 million funding pot is needed now to redesign, upgrade and renovate facilities, and avoid having to completely replace facilities, which could cost in the region of £1.5 billion further down the line.
  • Councils were not involved in targeting the distribution of the £1.57 billion support package to help protect the futures of UK theatres, galleries, museums and other cultural venues, even though councils are well placed to deliver some of the funding to those organisations requiring support.
  • The Chancellor’s recent announcement that the 15 per cent VAT cut for the tourism and hospitality sectors will be extended to the end of March 2021 is a positive step.  To ensure the sector can survive, the LGA is recommending as series of policy interventions, including:
    • Investing £30 million in libraries;
    • Introducing a £1 billion investment in the tourism sector
    • Rapidly rolling out of the next tranche of business and intellectual property centres;
    • Adopting a place-based approach to cultural recovery;
    • Expanding Tourism Zones to include innovative options for raising finance, including the option of a Tourism Levy
  • Extending the holiday season into autumn and winter; and investing in hospitality skills.

Further information

While councils’ main funding department is the Ministry for Housing, Communities and Local Government (MHCLG), a range of our services fall directly under the Department for Digital, Culture, Media and Sport’s (DCMS) remit.

Arts and culture

Councils play a key role in maintaining the cultural fabric of the UK. They spend over £1.1 billion on running over 3,000 libraries, and more than 350 museums, public archives, numerous theatres and galleries, and are responsible for many monuments and historic buildings. These services can improve public health and educational outcomes and can contribute to community cohesion. They attract tourists and other visitors, boosting our economies; a cultural institution can be a key anchor for a regeneration programme, and a major draw for businesses. Arts and culture add more than £10.8 billion to the UK economy every year.

Cultural organisations adapted imaginatively, providing new and innovative services for their communities, but they have been unable to generate income during this time putting many at risk of closure. The Government’s £1.57 billion support package to help protect the futures of UK theatres, galleries, museums and other cultural venues was therefore welcome. We were however disappointed that councils were not involved in targeting the distribution of the funding, given they are well placed to deliver some of the funding to those organisations most in need, and who are critical to the local cultural offer.

Parts of the creative industries have been hit harder by lockdown and the effects will last longer than for other sectors of the economy. Those businesses that rely on attracting audiences or visitors will be the last to return to normal operations with no clear picture of when that might be.  As well as supporting the sector in its time of need, we must also consider the part creative enterprises and freelancers will have in helping us lead the nation’s recovery. We must harness this creativity and innovation inherent in the sector to take on the challenges of a post-COVID world, generating jobs and investment in local economies.

To do this, we are calling for:

  • Adopting a place-based approach to recovery by ensuring councils are at the top table for discussions – including the new Cultural Renewal taskforce and the Tourism Industry Council.
  • Councils and Combined Authorities should be supported by ACE to develop more cultural compacts, as identified by the sector for the sector. with £400 000 revenue funding
  • Rapid rollout of the announced next tranche of business and intellectual property centres. These centres have proven their ability to reach and support a broader and more diverse range of entrepreneurs and will be critical to re-establishing a thriving ecosystem of small businesses and freelancers. Alongside this, a specific cultural and creative support offer should be developed, similar to Arts Council England’s digital champions.
  • Invest £30 million capital funding in libraries to develop a network of makerspaces and public access computers to turbocharge our country’s recovery, close the digital skills divide in many of our most deprived areas, and grow the entrepreneurs and innovators in every council area.
  • Provide councils with £500 million to invest in providers of social prescribing facilities, including leisure centres and libraries which support community activities.
  • Make £100 million capital funding available to convert disused retail units on the high streets into creative studios to enable creative industries to thrive and drive footfall to high streets by offering the chance to grow entrepreneurs and innovators for the future by delivering 3d printing, coding and display spaces for creative experimentation. This must be coupled with the planning powers needed to curate high streets, as was done by removing permitted development rights from theatres and performance venues, protecting them from inappropriate development and preserving them for the community. 

Sport and physical activity

Councils are responsible for a third of swimming pools, 31 per cent of grass pitches; 13 per cent of sports halls; and almost a fifth of all health and fitness facilities. They spend over £1 billion per year on sport, leisure and green spaces, parks and playgrounds, providing communities with access to vital facilities to improve their physical and mental wellbeing.

While they were allowed to reopen back in July, we are concerned about the future viability of leisure centres. Many were ineligible for much of the emergency funding due to their charity status but continue to incur costs whilst closed. As a result, our leisure partners report that they do not expect a return to viability for at least 6-12 months, putting many of those working in the sector at risk of redundancy, as well as risking losing our national leisure and sporting infrastructure. We are calling on the Government to introduce £700 million emergency funding to stabilise providers. Losing these services will leave many people and families without access to affordable leisure provision and exercise opportunities. They play an important role in reducing the burden on the NHS, tackling health inequalities and are a key delivery vehicle for the social prescribing agenda.

Parks and green spaces are also a key resource for physical activity and improving mental wellbeing. They are enjoyed by people of all ages across the country, and sit at the heart of local communities. The pandemic has further demonstrated how valuable they are. The money local government has to provide for parks and open spaces is running out fast and uncertainty remains about how councils will pay for services into the next decade and beyond. Coronavirus has further added significant funding pressures. For councils to be able to continue maintaining parks and reopen facilities, such as children’s play areas which will be essential for communities over the coming months, the Government needs to provide councils with long-term, sustainable funding for these services.

Another long-term issue which must be tackled is the country’s ageing sporting infrastructure. Sport England found that 63 per cent of mains sports halls and 60 per cent of swimming pools are past their expected lifespans or overdue refurbishment. Sport England has been providing effective support and investment in infrastructure, but their funds are oversubscribed with 1054 bids submitted to a grant fund that could only make 151 grants. Had Sport England been able to fund those bids, it would have unlocked match funding worth at least £540 million from councils and partners. We are therefore calling for a strategic investment of £500 million for councils to invest in leisure facilities, pitches, and parks to reduce obesity; ensure a healthier, more active nation in the future; reduce our carbon footprint; and prepare our communities for the inspiration provided by the Commonwealth Games.

Tourism and the visitor economy

Councils have a strong stake in the visitor economy. They are direct providers, running tourism attractions themselves, including castles and historic buildings, parks, piers, amusement parks, and destination management organisations. It is known that the visitor economy sector has taken one of the biggest financial hits due to COVID-19. Gaps in support packages alongside the absence of the seasonal boost the industry usually sees over the summer means the impact of the pandemic will be felt in the weeks and months to come, with many at risk of closure.

We welcome the Chancellor’s announcement of extending the 15 per cent VAT cut for the tourism and hospitality sectors to the end of March 2021. However,  we are additionally recommending the Government invest at least £1 billion into the sector, as well as introducing a funding programme that builds on the work of the Cultural Destination Programme, Great Places Scheme and Discover England Fund which enabled arts and culture organisations to increase their reach by working with the tourism sector.

Additionally, we are recommending that Tourism Zones, as announced as part of the Government’s Tourism Sector Deal, should be expanded. This should include innovative options for raising finance, including the option of a Tourism Levy, which LGA analysis has found there is consensus among local government and residents that a levy should be tested and receipts from taxation should be ringfenced for investment in the area that raised the tax.

To avoid a cliff-edge, the Government should also work to maximise 2020 income through extending the season into autumn and winter. Devolution and coordination of VisitBritain/England marketing funding to local areas should take place to enable creative approaches to boosting domestic tourism.

Skills

A significant portion of employment in coastal towns is from the visitor economy and a high proportion within the hospitality sector. Although the lifting of restrictions has seen visitors flock to the coast, social distancing measures mean many coastal businesses are not commercially viable and have reduced staffing levels. There has been a significant skills gap created in many local coastal areas and little funding has been allocated to creating apprenticeships. This could create a long-term impact on hospitality skills, which therefore needs addressing through government support.

Councils also need to be given devolved powers and responsibility for skills funding. Our publication, Supplying skills for the local visitor economy revealed that the fragmented skills funding landscape prevents councils from effectively connecting up skills training with the skills needs of the local area, and that this is particularly pronounced in the visitor economy. By adopting the LGA’s Work Local proposals, the Government could deliver on its devolution commitments and tourism sector deal promises, and also turbo-charge the visitor economy.

Contact

Laura Johnson, Public Affairs Support Officer
laura.johnson@local.gov.uk