The Digital, Culture, Media and Sport (DCMS) Select Committee has written to the Chancellor asking him to extend Government-backed insurance schemes to festivals and live music events or face them disappearing from our fields and cities for good.

Following a DCMS committee hearing on January 5, Julian Knight, chair of the committee, has written to the Chancellor. The letter also has the backing of MPs and more than 100 industry signatories.

MPs have warned that organisers and investors are unable to risk repeating losses sustained in 2020 unless events can be insured against cancellation.

With the commercial insurance market not expected to offer COVID-related insurance until 2022, a Government-backed scheme is required for festivals to start planning their events and signing contracts with artists and suppliers.

The appeal urges the Government to extend to other creative industries the underwriting schemes already offered to the film and television industries.

Julian Knight MP said: “The Government is telling us that life should be getting back to normal by the summer but unless it can provide a safety net, it will be a summer without festivals. 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 committee has heard from festival organisers that this is a matter of urgency. 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.

“The Government already offers a level of cover to the film and television industries, now is the time to extend support to other creative industries or risk losing some of our best loved and world-renowned festivals.”

On January 5, several festival professionals gave oral evidence to the DCMS Select Committee, including Boomtown, Parklife, the Association of Festival Organisers (AIF), the Association of Independent Festivals (AFO) and UK Music.

Sacha Lord, co-founder of Parklife, warned the committee that without Government assistance there was a good chance that the vast majority of festivals would disappear. He called for the Government to extend VAT reduction for a further three years, provide industry with a start date, back an industry-specific insurance scheme, extend business rate relief and provide furlough for the event and festival industry until events can operate at 100 per cent capacity.

Anna Wade, communications and strategy director at Boomtown, described the industry’s current situation as “pretty grave” and told the committee that it was unlikely that the festival industry could weather the storm of no festivals in 2021. She continued that it was vital the Government understood the precipice that the sector is standing on.

Paul Reed, chief executive of the AIF, said that a Government-backed insurance scheme could kickstart the industry. He stated: “We are rapidly approaching the determination point. It’s still too early to tell in a binary sense if the season is on or off. But the industry is reaching the point where it needs to make decisions on capital.

He continued: “Insurance is not the only barrier to festivals going ahead but it is the key to unlocking the planning process and the capacity to plan.”

As it stands, a proposal for a Government-backed insurance scheme is sitting with the Government but it is not known if it has been sufficiently escalated to the Treasury. The scheme would mean extra costs to an organiser but industry does need a “safety net”.

Jamie Njoku-Goodwin, chief executive at UK Music, warned that there would be major festival cancellations within weeks if a solution is not found.

Steve Heap, general secretary at the AFO, concurred. He said: “If we get as far as Easter and don’t know if crowds can gather this summer then we will be in a catastrophic situation.
“Customer confidence is another big hurdle to overcome. Customers are not prepared to release funds because they are not sure if an event will go ahead. An enormous amount of people are chomping at the bit to buy tickets but they need to know they’ll be safe when they arrive.”
It was posed to MPs that the Government could back a “huge marketing effort” to instil confidence in the public that it is safe to gather at events and festivals. Reed also stressed that the positive economic impact of festivals will be essential to the recovery phase of COVID-19.

Njoku-Goodwin continued: “There is more that the Government can do to provide clarity that will help us across the park. If the insurance industry won’t cover COVID until 2022, it’s a year the industry can’t wait for.”

Heap told the committee that scientists could aid the sector by establishing what percentage of the population needs to be vaccinated before the Government says that “we’re allowed to have a crowd” and that there is a major concern that when we are allowed to regenerate will there be the infrastructure available to regenerate.
Reed said: “Audience loyalty is not the issue. Getting through this [situation] is the issue with requisite Government support.”