Written evidence submitted by Lewisham Council Digital, Culture, Media and Sport Committee: Impact of COVID-19 on DCMS Sectors 1. Introduction 1.1. Thank you for the opportunity to submit evidence to the Digital, Culture Media and Sport Committee on the Impact of COVID-19 on DCMS Sectors. This evidence provides an overview of the information council officers have heard from organisations and individuals about the impacts COVID-19 has had on Lewisham’s vibrant, diverse and growing cultural and arts sector. 2. About Lewisham 2.1. Lewisham is an inner London borough in south east London. The creative industries are a thriving part of Lewisham’s identity. 2.2. The creative industries are a vital part of Lewisham’s economy and culture, especially in the north of the borough. Key sectors within Lewisham include music, visual and performing arts, and design. 2.3. According to the latest release from the Office for National Statistics, Lewisham’s creative industries contribute over £300 million to the local economy and create 3,512 jobs. 2.4. Lewisham was awarded the London Borough of Culture for 2021 on 11 February 2020. Due to the COVID-19 pandemic this award has been delayed to 2022. 2.5. Lewisham is one of six Creative Enterprise Zones in London, which aim to provide investment and support creative businesses. 2.6. The majority of the creative industry is made up of small and medium enterprises. However, there are a few larger institutions: Goldsmiths University, Trinity Laban, the Horniman Museum and the Migration Museum. Lewisham Creative Industries Count Employment Turnover (£000’s) Advertising and Marketing 170 261 34,660 Film TV 380 504 38,057 Computer services 975 1,272 107,178 Architecture 65 158 8,039 Design 230 304 25,473 Publishing 75 120 8,249 Music and Arts 390 619 55,942 Telecommunication 30 73 8,739 Finance 80 128 11,971 Insurance 25 73 5,780 Total 2,420 3,512 304,088 ONS, Creative industries in London boroughs, 15 March 2019 https://www.ons.gov.uk/businessindustryandtrade/business/activitysizeandlocation/adhocs/009756 creativeindustriesinlondonboroughs 3. The immediate impact of COVID-19 on the sector 3.1. The immediate impact of COVID-19 has been devastating on the creative industries in Lewisham. 3.2. With much of the borough’s creative industry comprised of small and medium enterprises, the loss of income from commissions, events and visitors has been catastrophic. Unlike larger organisations they are unable to rely on donations from the public or other fundraising ideas. 3.3. Many who work in the industry are employed as freelancers employed for specific commissions or events. Therefore, freelancers have also been disproportionally impacted by the cancellation of events. 3.4. Multiple organisations said that existing commissions or customer orders have been cancelled. 3.5. Some organisations spoke of the challenge of balancing work with caring commitments for children. 3.6. There is anecdotal evidence that COVID-19 has accelerated the loss of artists and creatives from London. With many leaving or making plans to leave London due to the high cost of living, rents for studio spaces and the reduction in income due to lockdown. 3.7. There is also concern in the industry about the mental health of its staff, especially freelancers who are facing huge financial uncertainty. 3.8. On 21 April 2020, Lewisham Council hosted an Arts Sector Virtual Meeting attended by representatives from 27 different organisations. It was clear that many organisations had taken up the Government’s furlough scheme and were running on reduced staffing. 3.9. At least four of the 27 organisations were applying for the Arts Council England’s Emergency Response Funds: for Individuals, and for Organisations. 3.10. On this call it was clear that many artists with studio space had agreed payment plans with the organisations they leased the space from. However, these organisations also rely on this income and there was concern about the knock-on effects. 3.11. Some organisations are helping freelancers apply for emergency funding. 3.12. Many organisations are now considering how to move events and classes online, but there are concerns these may not be accessible due either to lack of digital equipment or the resources required to take part in the activity such as materials and musical instruments. Additionally, there were also concerns that digital productions may not meet the high production values their organisations hold themselves up to. 3.13. They were also concerned about ensuring online lessons are age appropriate, that content is suitable or tailored for children with special educational needs, as well as uncertainty from the organisations over safeguarding. Case Study: Teatro Vivo Teatro Vivo is a critically acclaimed production company that has been performing professional productions in the heart of local communities for 16 years. Examples of their work include Shakespeare to Supermarkets and The Odyssey, set on the streets of Deptford. As with other small arts organisations, due to COVID-19 the company has faced significant loss of income due to the cancellation of events such as the Crystal Palace Festival. This has resulted in 25 freelance arts professionals losing work. Additionally, due to the pandemic, the prospect of future work in the summer or autumn has either been cancelled or delayed. This means that Teatro Vivo will be unable to provide a large amount of vital work for freelancers this year. 4. Effectiveness of support by DCMS and other government departments 4.1. Many of Lewisham’s creative industry organisations have praised the Government’s Job Retention Scheme. 4.2. However, organisations that had a high proportion of freelancers were much more critical. A large proportion of those working in the industry are freelancers and have not been able to receive support from the self-employment income support scheme (SEISS). This could be because they have been a freelancer less than a year or rely on secondary incomes from temporary PAYE work. 4.3. Many freelancers operate as a limited company as their only employee. Using the job retention scheme meant putting their entire business in hibernation which they were reluctant to do. 4.4. The sole trader and freelance schemes were criticised for only being available to businesses which had been established in the last 18 months, due to the need for a 2018/19 tax return. 4.5. There was also criticism as payments were based on profit/net income, not revenue. For creatives with fixed overheads to pay this was a particular concern. 4.6. Organisations were concerned that tax deferral schemes would only push the problem further down the line and that their financial situations would not have improved by the time the tax was due to be paid. 4.7. Many in the industry have been cautious about taking out Bounce Back loans as they are concerned about taking on new debt and loans, especially with the great uncertainty over the future of the industry. 4.8. There has been much praise from the industry for the support Arts Council England has provided. 4.9. Smaller organisations in Lewisham do not feel they are receiving sufficient support and are relying on help and advice from their supporters and funders. The Albany is a performing arts centre in Deptford, Lewisham. The centre has four performance spaces and has a maximum capacity between 300 and 500 people. It has been awarded many awards over recent years for its innovative programmes including for Meet Me at the Albany, an all-day arts club for isolated older people. By the end of September the Albany expects to lose £600,000 due to COVID-19. This will have significant impact for the Albany and its staff including pay cuts, job losses, and a reduction of investment in new work, as well as a severe reduction in the employment of freelancers and artists. Under the Government’s Job Retention Scheme 72 staff at the Albany have been furloughed which has been vital for the organisation in responding to the crisis. However, the organisation still expects it will take years to recover to ‘anything like a normal level of activity’. Case Study: The Albany Case Study: Cockpit Arts Makers Cockpit Arts is London’s leading studios for contemporary crafts and the UK’s only business incubator for makers and designers. They have 145 creative businesses over two sites, including in Deptford, which supports 300 jobs. They offer both studio space for makers as well as a place where the public can visit and buy pieces directly from makers. Without further support they estimate 30% of businesses based at their sites will cease trading, while they forecast a £250,000 reduction in their finances between March and September. While the Job Retention Scheme was useful for the businesses with PAYE employees, this only made up 10% of Cockpit makers. The majority of creative businesses at Cockpit Arts are operating as a limited company with only a sole employee. The Job Retention Scheme would have required these businesses to effectively pause all activity. Nor did the scheme help the 130 freelancers associated with Cockpit. They highlighted that other schemes such as the sole trader and freelance schemes did not assist recently established businesses that were less than 18 months old. Cockpit have found the huge amount of uncertainty in the industry has made their creative businesses reluctant to take on further debt or take advantage of loan schemes. They did however note that the Bounce Back loans were useful for businesses with existing debt. 5. Long term impacts of COVID-19 on Lewisham’s creative sector 5.1.