The UK government has been accused of failing to recognise the impact COVID-19 has had on culture, sport and tourism, according to a wide-ranging Parliamentary report.

The Digital, Culture, Media and Sport (DCMS) Select Committee said the government has been “too slow” to respond to the needs of the sectors during the Covid-19 outbreak, with many organisations facing an “existential threat” to their survival.

The damaging report claims that DCMS has been hampered by its “lack of spending power” and a “fundamental misunderstanding” across Government of the needs, structures and vital social contribution of sectors such as the creative industries.

The report finds that the loss of performing arts institutions and cultural workers would put at risk the Government’s “levelling up” agenda and reverse “decades of progress in cultural provision, diversity and inclusion.”

DCMS Committee chair Julian Knight MP said: “We are witnessing the biggest threat to our cultural landscape in a generation.

“The failure of the government to act quickly has jeopardised the future of institutions that are part of our national life and the livelihoods of those who work for them.

“Our report points to a department that has been treated as a ‘Cinderella’ by government when it comes to spending, despite the enormous contribution that the DCMS sectors make to the economy and job creation. We can see the damaging effect that has had on the robustness and ability of these areas to recover from the Covid crisis. The £1.57bn support is welcome but for many help has come too late.

“We urge the government to act on our recommendations, to recognise the value these sectors provide and imagine how much bleaker the outcome for all without their survival.”

The report said Culture Secretary Oliver Dowden’s roadmap for when theatres will reopen has been “vague and slow-coming”, adding that the support package has arrived too late for many in the industry as they face redundancies.

In addition, it said the delayed announcement of the £1.57bn emergency culture package was “regrettable” as redundancies could have been avoidable if the government had acted sooner.

MPs noted that the success of the funding depends on “how long institutions remain closed or subject to social distancing”, as for most venues it is only financially viable to run at 60-80% capacity.

The DCMS Select Committee recommends extending the furlough scheme, which has helped stop redundancies in cultural institutions, continued support for freelancers, clear timelines for reopening, and “long-term structural support” – including tax relief and a VAT cut.

Tom Kiehl, chief executive of UK Music, the umbrella body for the UK music industry, said the committee is to be congratulated on the “bold approach” they have taken.

He said: “This is a watershed report in the fight for survival for many companies and individuals working across the music industry following the devastating impact of COVID-19 on the whole sector.

“Eligibility for cultural funding needs to be as broad as possible so that no part of the music industry gets left behind. Gaps in existing support schemes need to be plugged and extended so that those that simply cannot work can continue to make ends meet.

“Music also needs crucial tax reliefs and further financial incentives to stimulate our eventual revival and recovery.

“The music industry was one of the first sectors of the economy to get hit by social distancing measures and could be one of the last to recover. The work is not done. The Government must continue to act.”