UK live sector proposes a government-led contingency fund to avoid further festival cancellations


April 21, 2021

UK live music industry trade group LIVE has called on government to create a COVID contingency fund for large-scale events. This follows the announcement that another UK festival has been forced to cancel its summer 2021 edition because of insurance issues, even though COVID rules may be sufficiently relaxed by August that it could have gone ahead.

If the current plan for lifting COVID restrictions in England is achieved, music festivals could return in July and August this year. However, there is still a risk social distancing requirements will extend.

The problem for festival organisers is that cancellation insurance is not currently available on the commercial market, meaning if they continue working on 2021 editions that do have to be ultimately called off, they’ll face crippling losses. As a result, those festival organisers are having to make difficult decisions about their 2021 activity right now, which means that even if it turns out that COVID rules do lift in June, there may not be many festivals this summer.

The live sector has been calling for months now for the government to introduce state-backed insurance for these events – something that has been introduced in some other countries – which would ensure that festivals can return as soon as COVID rules allow. However, to date, British ministers have rejected such proposals.

Hampshire-based Boomtown Fair was the latest festival to announce its cancellation because of insurance issues this week. The event’s promoter stated: “After almost half a year of collective campaigning to the government, sadly COVID specific cancellation insurance for events still does not exist at this point in time”.

“This means anyone putting on an event this year will be doing so without the safety net of insurance to cover them should COVID prevent them from going ahead in any capacity. For an independent event as large and complex as Boomtown, this is a huge gamble of up to an eight figure sum and the financial risk is simply too high”.

Responding to the Boomtown announcement, Paul Reed – CEO of the Association Of Independent Festivals – said yesterday: “The cancellation of Boomtown Fair is devastating but not surprising, and further festival cancellations will follow”.

“AIF has been warning and providing evidence to the government for over six months on the urgent need for intervention on insurance. It is an enormous risk for any independent festival to commit to upfront, non-refundable costs and very difficult to plan with confidence in the absence of insurance. The average cost of staging an independent festival is over £6 million”.

“A recent AIF member survey revealed that 92.5% of respondents do not plan on staging their events without some form of government-backed insurance or indemnity scheme, with the measure being described as vital not optional”, he went on. “Considering the lengthy planning cycle of festivals, it is difficult to think anything other than we are being timed out for the summer”.

Noting remarks by UK ministers that they are still hopeful that their current COVID plan will allow a “summer of live events”, he added: “Governments across the rest of Europe have already acted to support festivals, sharing the risk with organisers so that they may reopen safely. If this government doesn’t intervene in some way on insurance and back its own roadmap, I’m afraid that, despite the rhetoric, it won’t be a great British summer for events – it will be an extremely selective one despite the clear demand and huge amount of customer confidence that the roadmap has injected”.

Speaking for the wider live sector, the LIVE organisation has written to the Prime Minister, Chancellor Of The Exchequer and Culture Secretary proposing that – if ministers are unwilling to offer full-on state-backed cancellation insurance – they at least use some of the monies already set aside for supporting the cultural industries to create some kind of contingency fund for live events.

“The Prime Minister has made various references to this being a great British summer of music and sport, and the sector is planning furiously to be able to start activity again”, LIVE said in a statement yesterday. “But the absence of commercial insurance for cancellation cover makes the prospect of any activity, but particularly that at large scale and cost, fraught with risk”.

In a bid to find a compromise that will ensure as few events as possible are forced to cancel, LIVE said it was proposing to ministers “that some of the unspent Culture Recovery Fund money be used to create a contingency fund. This fund would offer partial protection to organisers should events have to cancel because of a public health decision”.

The group’s CEO Greg Parmley added: “Without some form of contingency fund in place, the risk of undertaking activity this summer will simply be too great for the majority of events. We are already seeing an increasing rate of cancellations, including Glastonbury and now Boomtown, and that will become a flood in the coming weeks if a solution isn’t found.

“The live music industry thinks that using unspent Culture Recovery money to create a contingency pot to provide some form of protection for events is the best way to get money through the entire live music ecosystem – from artists and venues to technical staff and freelance crew – by enabling people to get back to work”, he added. “The Prime Minister has said he wants this to be a great British summer. So do we. But that won’t happen if our world-leading live music events disappear for the second year in a row”.

PM ‘Boris’ Johnson recently said that he is “passionate” and working “flat out” to find a solution to all the touring issues brought about by Brexit. It remains to be seen if he’s able to take a break from that and help another section of the live music industry.

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