On October 31, Chancellor of the Exchequer Rachel Reeves MP unveiled the 2024 Autumn Budget, announcing a series of tax and spending measures that will significantly impact the arts and culture landscape in the UK. The various funding initiatives outlined by Labour’s predecessors are facing waves of cancellation – yet some positives remain.
Public Spending – a brief overview
The Government's commitment to increase overall public spending is encouraging, yet it does not guarantee enhanced funding for the arts. The Department for Culture, Media and Sport (DCMS), which serves as the principal public funder for the arts, is facing a complex budget scenario.
In 2023, the DCMS budget was at £2.07bn for the total departmental budget, and as of now, it has risen by 14.59 percent to £2.37bn. Compared with the Spring Budget, this is a £100m increase for day-to-day spending and £194m for capital spending. However next year, the total DCMS budget is set to decrease by 3.5 percent in terms of day-to-day expenditure. In sum, a 2.5 percent cut for day-to-day spending and a 16.2 percent increase in capital spending between 2023-4 and 2025-6, in real terms.
A graph from the Institute for Fiscal Studies shows that, second only to the Home Office, day-to-day average real annual growth rates are at just over -3 percent for the DCMS for these three years, the second lowest out of 15 departmental areas.
Risks to Culture Projects
In a worrying development, the Autumn Budget outlined the cancellation of Jeremy Hunt’s third stage of the Levelling Up Fund. The Fund was meant to give £100m to 9 local and national culture projects, originally earmarked for organisations like our own York National Railway Museum, and the British Library North. I was disappointed to learn of this cancellation – to my mind, cultural access should be a part of the government’s growth scheme, rather than being viewed as a hindrance to it.
Local Government Funding
Local authorities remain the largest public funders of culture, heritage and libraries in England. However, their investment has plummeted by nearly half since 2010, largely due to financial pressures from other local services, particularly social care. Rachel Reeve’s promise of a real terms increase in core local government spending power by around 3.2 percent may alleviate some pressures, but it is insufficient to address the long term decline in arts funding.
UK Shared Prosperity Fund (USPF)
The USPF was established in 2022 as a domestic replacement funding source for EU structural funds that were, of course, withdrawn following Brexit. The fund aimed to improve engagement in local cultural institutions, with £2.6bn over three years dispersed directly to them. The Autumn Budget, however, says this is to be phased out incrementally until completion in 2026.
Creative Industries Tax Reliefs
From 2007-2017, the creative industries tax reliefs incentivised new work by decreasing Corporation Tax. As of the 2024 Spring Budget, Hunt introduced additional relief for visual effects costs and for independent film companies. The Autumn Budget will, thankfully, continue with these tax relief schemes. The Office for Budget Responsibility noted company tax credits have been revised up by an average of £0.7bn each year.
However, owners of independent art galleries and artists themselves have taken to the internet to express dissatisfaction with the tax hikes in other areas with regard to small businesses. One dissatisfied spouse of an art gallery owner has said via Linkedin: “My wife’s margins are wafer thin and this budget has just increased her costs by £15,000 a year. She, like many other businesses will have to increase prices to pay for this…funding for growth will remain expensive.”
Whilst the Autumn Budget continues with the tax reliefs introduced over the last decade, the cessation of various funding initiatives is no cause for celebration. One can only hope that this is a simple case of scrapping to rebrand, where Labour is set to reintroduce these funds under their own banners and terms. Let us hope it does not take five years to do this.
