What did the Autumn Budget mean for the arts? 🤔

We do not currently know to what extent the DCMS will pass on funding cuts or increases to the arts. However the Government has committed:

• to increase support for arts and culture “by raising Grant-in-Aid for the National Museums and Galleries to help support their long-term sustainability, and providing a package of cultural infrastructure funding“
• £3 million to expand the Creative Careers Programme, “giving school children the opportunity to learn more about career routes and directly engage with the workplace”
• £25 million for the North East Mayoral Combined Authority to remediate the Crown Works Film Studios in Sunderland

Local government funding in England

Taken together, local authorities are the biggest public funders of culture, heritage and libraries in England – however, their investment has practically halved since 2010. More and more councils’ support for the arts is being jeopardised by funding and demand pressures on local services, particularly social care.

The Chancellor has committed to “support local authority services through a real terms increase in core local government spending power of around 3.2%, including at least £600 million of new grant funding to support social care”.

The Local Government Association has said that this will “help meet some – but not all – of the significant pressures” on councils, describing the Budget as “a step in the right direction”.²

Levelling Up Culture Projects

At the Spring Budget, the then-Chancellor Jeremy Hunt announced £100m of funding for culture projects, as part of the third round of the ‘Levelling Up Fund’. This was due to benefit organisations including the National Railway Museum in York, the Poetry Centre and British Library North in Leeds, Venue Cymru in Conwy, V&A Dundee and National Museums Liverpool, as well as the NI Executive and 9 places “most in need of the kind of investment that the Fund provides”.³

The Autumn Budget reveals that “to ensure investment is focussed on the growth mission, the government is minded to cancel” funding for these projects, but “will consult with potential funding recipients before making a final decision”.

It is very disappointing to see such a large investment put at risk. The Campaign for the Arts believes that local cultural access can and should play an important role in delivering the government’s growth mission.

UK Shared Prosperity Fund

The UK Shared Prosperity Fund (UKSPF) was established in 2022 as a domestic replacement for EU structural funds withdrawn after Brexit. One of its aims was to increase “engagement in local culture and community across the UK”, by giving funds directly to local places. £2.6 billion was committed over a three-year period.

The Autumn Budget suggests that the UKSPF will be phased out the year after next. It will continue “at a reduced level for a transition year by providing £900 million for local authorities to invest in local growth, in advance of wider funding reforms”.

The reduction of this fund, and its planned removal without a clear replacement, is very disappointing, especially at a time when local councils’ own funding of culture projects is under pressure.

Funding for the devolved governments

Outside of England, most decisions on public spending for the arts and culture are taken by the devolved administrations. They receive block grants from the UK Government, based on the ‘Barnett formula’, as well as targeted funding.

The Chancellor announced that in 2025-26:

• The Scottish Government will receive £47.7bn, an increase of £2.5bn;
• The Welsh Government will receive £21bn, an increase of £900m;
• The Northern Ireland Executive will receive £18.2bn, an increase of £1bn.

We continue to call on the Scottish Government to deliver on their promised £100m increase in cultural investment, following several U-turns and growing financial precarity for Scotland’s artists and cultural organisations. Responding to the UK Government Budget, Culture Secretary Angus Robertson said: “Sorry to see cut to DCMS revenue budget. In Scotland, funding now rising towards £100m additional annual spend for Culture”.⁴

Creative industries tax reliefs

Between 2007 and 2017, the Government introduced eight ‘creative industry tax reliefs’ which apply across the UK. They incentivise new work by reducing Corporation Tax on companies producing films, animation, high-end and children’s television, video games, theatre, exhibitions and orchestral concerts.

At the 2024 Spring Budget, the then-Chancellor Jeremy Hunt announced additional relief for visual effects costs and a new relief for independent films. He also announced that reliefs for theatre productions, orchestral concerts and museum/gallery exhibitions would be set permanently at 40-45% from April 2025.

At this 2024 Autumn Budget, the Government has committed to continuing the “tax reliefs for world-leading creative industries, which will provide £15 billion of support over the next 5 years”, and to bringing the reliefs proposed at the Spring Budget into legislation.

This is very welcome, not least because the total amount of creative industries tax relief paid by the UK Government has been growing considerably. In their assessment of the Autumn Budget, the Office for Budget Responsibility noted “company tax credits have been revised up by an average of £0.7 billion each year. This is due to higher-than-anticipated creative tax reliefs outturn, particularly driven by high-end TV relief”.⁵

However, the scale and reach of tax relief varies significantly across the creative industries. The State of the Arts report showed that investment through the tax reliefs vastly exceeds the DCMS’ grant-in-aid sponsorship of the moving image, but for other art forms the opposite is the case.⁶

Schools funding in England

The government has allocated an extra £2.3 billion to the core schools budget for 2025-26. This means real-terms spending per pupil will rise to around £8,100 – just above the high-point of £8,000 in 2010.⁷

Funding pressures on schools have been cited as a major driver of reduced arts opportunities for children and young people.⁸ The Campaign for the Arts hopes that this funding increase helps to address this, and that the government’s forthcoming curriculum review will ensure a quality arts and cultural education for every child.

Taxation

National insurance

The biggest revenue-raising measure in this Budget is a higher rate of employers’ national insurance contributions (NICs), and a lower threshold at which employers start paying them.

Official statistics show that self-employment is much more prevalent in the cultural sector (48% of all jobs) compared with the UK economy as a whole (14% of all jobs).⁹ Therefore, because employers’ NICs only apply to employed jobs, the cultural sector may be less affected than other sectors by the changes to employers’ NICs.

However, amongst those who are employed, median earnings in the cultural sector are below the UK average.¹⁰ Analysis by the Institute for Fiscal Studies has shown that the lower the pay of employees, the bigger the change will be in the cost to employers. This is largely because of the lower salary threshold at which employers will have to start paying NICs. In this respect, the cultural sector may be hit harder than others by the changes to employers’ NICs.

More broadly, the measure has the potential to incentivise less employment or the shifting of current employees into self-employment. A recent study by the University of Essex for Arts Council England reported that freelance workers face major issues with pay, progression and wellbeing in the creative and cultural industries.¹¹

Business rates

Business rates are charged on most non-domestic properties, and are currently a key source of funding for local government.¹²

During the pandemic, the Government introduced relief for retail, hospitality and leisure businesses in England, including cinemas and music venues. At the 2022 Autumn Statement, the then-Chancellor Jeremy Hunt extended the relief and increased it from 50% to its current rate of 75%.¹³ At this 2024 Autumn Budget, Rachel Reeves has extended the relief again but reduced the rate from 75% to 40%.

In their manifesto, Labour pledged to “replace business rates in England with a revenue neutral system that levels the playing field between online and high streets”. The Chancellor indicated that there will be major reform from April 2026, but at least until then, cinemas and music venues will have to pay more in tax.

According to the Music Venue Trust, 76 grassroots music venues closed in 2023, with 42% of them citing financial issues.¹⁴