UK festivals may not survive if a government-backed insurance scheme against the risk of cancellation is not made available soon, according to MPs on the Public Accounts Committee.

The parliamentary group’s report, released today (Wednesday), on the Department for Digital, Culture, Media and Sport’s (DCMS) Covid 19: Culture Recovery Fund suggested that a lack of knowledge of the sector has led to its failure to act.

The eighth report on the issue reads: “This year there is also a survival threat to festivals without a government-backed insurance indemnity package against the risk of cancellation.

“Although the Department expresses confidence that the Culture Recovery Fund provides value for money, it is vague about how it knows this to be the case. Its evaluation of the programme during 2021 gives it an opportunity to learn and apply the lessons to its future oversight of the sector, including a fresh look at the challenges the sector faces and how best the Department can support the sector’s creative and economic potential in the future.”

While the report acknowledges the government’s efforts with the £1.57bn Culture Recovery Fund, designed to save up to 75 per cent of organisations in the arts, culture and heritage sectors at risk of financial ruin amid the pandemic, issues have been reported leaving some organisations in a “perilous financial situations”.

The report highlights that the Department’s need to act quickly to provide funding to applicants, while also protecting taxpayers’ money, meant some applicants’ experiences “could have been better”. Some organisations found it difficult to apply for funds, while many unsuccessful applicants received no feedback.

The report also pointed to issues over the lack of support for crew and technicians. The report said: “The Department has only partial knowledge about the fund’s impact on freelancers, commercial organisations, supply-chain businesses and festivals.

“Festivals are making difficult decisions about whether to risk their survival by going ahead this summer, but the Department has not modelled the cost of underwriting festival indemnity insurance.”

DCMS established its CRF fund last July, which has awarded grants and loans to thousands of organisations, including Shakespeare’s Globe, the Royal Albert Hall, the Cavern Club, Glastonbury and Canterbury Cathedral, with festivals receiving more than £34m of the total.

However, the report comes after Kendal Calling decided to cancel this week for the second year in a row due to a lack of government-backed insurance. The festival had applied for funding through the CRF, but received no government support.

In addition, the MPs questioned ministers on how Arts Council England, which oversees the allocation of the funding, would manage the repayment of £252m in loans over the next 20 years.

Loan recipients will not be required to pay back money for the first four years of the typical 20-year loan term.

The report states: “Arts Council England has no previous experience of managing a loan book and says that the extra financial skills it needs to manage the loans are now largely in place. While the Department believes it can manage the risk of default, and Arts Council England is confident of its mechanisms to alert it to risks of non-payment, neither have sought to utilise the considerable loan management expertise that already exists elsewhere in government.”

Image: Chris Gent / CC BY-NC-ND 2.0 / Edited for size