What Next? Briefing note – Energy rises / talent drain / cost of living 21/09/21

What Next? Briefing note – 21/09/21
Energy rises / talent drain / cost of living

Elizabeth Crump – lizzie@whatnextculture.co.uk

We believe that the next three months will be critical for the arts and cultural sector, with many overlapping issues serving to create a significant crisis.

We know that, for many organisations, their spiralling energy bills will be enough to put them out of business in the short term; and that for many individuals / freelancers, the rise in their own cost of living means that they cannot continue working in the sector without stronger financial incentive and security.

This will likely impact more heavily on those with lived-experience of discrimination and those with protected characteristics. Workforce diversity is likely to be further decimated.

The two issues appear to be compounding each other, with many organisations reporting also that they cannot recruit sufficient staff now to deliver their autumn / winter programmes: the talent drain of the pandemic has been exacerbated, and these jobs need to be urgently re-incentivised. This has been anecdotally reported across both freelance and salaried jobs, with pay and conditions proving uncompetitive compared to other sectors.

Materials costs / the costs of making work have risen very sharply, and employers are realising that they need to think about raising wages in line with inflation: few can afford this.

Colleagues are seeing real hesitancy from audiences in terms of future tickets – and there are fears that this will get more pronounced as the cost-of-living rises. Colleagues are reporting that published programmes and business plans cannot now be delivered in the way they have been envisioned, and conversations with multiple funders will now need to be had about what is possible. Creative decisions will need to be predicated on financial drivers, but also on the UK’s wider need to drastically reduce its energy usage.

Some colleagues have said that this crisis feels very much like the space they were in two-years ago when COVID hit, whereas others, (particularly those with fixed energy tariffs) can see the same problems coming to them in the spring or further down the line. Some organisations were able to build up some reserves during COVID, whilst others have used all of theirs over the crisis.

It is difficult at this stage to define the scale of the problems that the sector is facing.

This week we should learn more about the details of the Energy Bill, and the individual cap / org package that they government is putting forward. In the initial announcement of the package, there was a six-month pledge for a guarantee for businesses, plus a mention of more long-term support for ‘vulnerable sectors’, but no details of this have yet been released.

For some individuals and organisations, the cap will not be enough to prevent them from going under. The rises will still be enough of a percentage of their income to push them over the edge, especially when coupled with the other rising costs and fall in audience income.

Many sector organisations, like the Music Venue Trust have already been active in their advocacy on the crisis: https://www.musicvenuetrust.com/2022/09/music-venue-trust-energy-costs-policy-statement

It is extremely difficult for any individual organisations to speak out publicly or individually on this issue, both because of the need to manage communications with their staff, and also because they have live funding applications in play, and do not want to do anything which they perceive might affect the outcome of these bids.

What Next? believes that this is an important time for us to come together to talk through the actions we need to be taking.

Here are some of the issues / first thoughts to bear in mind:

• As many of these issues are affecting the whole of society, and are not sector specific, it is going to be difficult to make an exceptionalist ask to government to fund the arts (and not other businesses) at this current moment. It seems like the focus of any intervention should be targeted to those who need it, rather than a universal support, as this is not affecting everyone in the same way.
• To make any argument for immediate investment or intervention we will need some data which tells us the scale of the crisis, and how much of the workforce / how many organisations will not be able to survive until April / what the effect on their creative output will be.
• Alongside emergency funding could be an ask for return of Business rates / tax / vat measures that were in place in the pandemic. Trade bodies are already suggesting this.
• There is already talk across the sector and local authorities about cultural organisations operating as ‘Warm Hubs’ for those struggling to heat their homes or access the internet. Lynn Gardner suggested this in the Stage: https://www.thestage.co.uk/opinion/opinion/lyn- gardner-instead-of-hunkering-down-this-winter-theatres-should-be-warming-up-the- communities-they-serve and the Guardian reported this: https://www.theguardian.com/business/2022/aug/20/libraries-and-museums-to-be- warm-havens-for-people-struggling-with-energy-bills
• During the pandemic, a great deal of analysis and lobbying was done by volunteers and grass-roots sector organisations. Many of the individuals involved in this process are now having to turn their whole attention to sustaining their livelihoods / are suffering from burn- out. The infrastructure that supports these organisations and collectives is not currently sufficient to sustain them, and there is a risk that, without immediate help, vital voices and perspectives will be lost from the dialogue around solutions and ways forward. Those most likely to be affected are those least likely to have capacity to speak on this issue.
• Reducing energy costs is going to necessitate significant modifications to buildings, and funding and support will be needed for this in the longer-term. Organisations are considering turning down heat and power, but are also considering COVID safe practice and the need to ventilate, especially over the coming winter.