By Ben Kerrigan-
UK music festivals and other live events are to be protected by a government-backed insurance scheme if they have to cancel because of Covid.
The scheme will begin next month with a £750m budget to cover cancellation costs if events are legally unable to happen due to government Covid restrictions.
The live events industry, which has in the past called for such a plan, welcomed the announcement with joy.
In a detailed statement by the government when the scheme was announced on Wednesday, it highlighted the fact that with ‘a sufficiently high proportion of the population vaccinated, the country can learn to live with COVID-19, without the need for the strict economic and social restrictions’.
The statemen continued: ”This scheme will support live events across the UK that are open to the general public – such as music festivals and business events. It will cover costs incurred in the event of cancellation due to the event being legally unable to happen due to Government Covid restrictions.
The live events sector is worth more than £70 billion annually to the economy and supports more than 700,000 jobs, including small businesses and the self-employed.
A number of prominent insurers in the Lloyd’s market, including Arch, Beazley, Dale, Hiscox and Munich Re, have lent their support to the scheme which will provide events companies with the option of purchasing cover from next month, alongside standard commercial events insurance, giving them the reassurance they need to plan ahead while also ensuring value for money for taxpayers
The new scheme will have insurance companies provide cover for live events, with the government agreeing to act as a reinsurer – guaranteeing that any pay-outs will be funded.
Confidence
Julian Knight MP, who chairs the House of Commons culture select committee, said: “Though it is a shame that it has come too late for some this summer, this scheme will provide the confidence the sector needs to plan and invest in future events.”
MP Julian Knight says Scheme will provide confidence Image:Facebook
Promoter Live Nation UK called it a “vital intervention” that would give the sector “certainty”.
However, there are concerns that it will just pay out if events are banned by another lockdown. The Musicians Union said “the major problem” with the scheme is that it does not cover events that would become uneconomical if social distancing came back into force.
The Association of Independent Festivals welcomed the scheme, but said it doesn’t “cover a festival needing to reduce capacity or cancel, due to social distancing restrictions being reintroduced”.
Chancellor Rishi Sunak said the lack of “the right kind” of insurance had proved “a problem” for the UK’s live events industry.
“As the economy reopens I want to do everything I can to help events providers and small businesses plan with confidence right through to next year,” he said.
Culture Secretary Oliver Dowden called it “an important next step” for the live events sector, and said it would give organizers “the confidence they need to plan for a brighter future”.
The development comes after the government’s £1.8bn Culture Recovery Fund was set up to provide grants for arts organizations and heritage sites affected by the pandemic.
Jamie Njoku-Goodwin, head of trade body UK Music, said: “We are extremely grateful to government for listening to the calls of the sector and delivering a solution to the market failure in the insurance industry.”
Head of trade body UK Music: Jamie Njoku-Goodwin Image:prsfomusic.com
Gratitude
Gratitude was also expressed by Sacha Lord, Co-Founder of the Parklife Festival, Co-Founder of The Warehouse Project events, and Night Time Economy Adviser for Greater Manchester.
He said: ”I’m really pleased that the Government has decided to introduce an insurance scheme for the events sector.
DCMS has worked alongside and listened to event organizers throughout the crisis, and I’m grateful that they have now been able to introduce this support today.
The events sector has been in dire straits throughout this crisis and this move will not only save hundreds of upcoming events, but will support the thousands of freelancers behind the scenes who depend on the sector for their own livelihoods.
We can start to rebuild the sector with confidence, and renew the UK’s status as a global leader in entertainment and cultural events”.
Sacha Lord, Co-Founder of the Parklife Festival, Co-Founder of The Warehouse
However, not everybody was impressed with the scheme. Shadow culture secretary Jo Stevens described the scheme as “a solution that doesn’t address the problem”.
Events companies will be able to purchase the cover from next month, with the scheme set to run until September 2022.
Tim Alderslade, chief executive of industry body Airlines UK, said despite the latest changes to the UK’s traffic light system it was one of the “few sectors that cannot reopen properly”.
“We’ve now had two summers of precious little revenue and we’re at the limit of what we can borrow,” he said. “Tens of thousands of jobs are at stake and without furlough it will be very tough.”
The government said it was providing an “unprecedented package” of support to protect jobs and businesses, and the airlines sector would have received about £7bn by the end of September.