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Scotland facing a ‘cultural catastrophe’ with £1.7bn drop in creative industry GVA

Edinburgh Festival Fringe crowds on the Royal Mile. Image credit: Jane Barlow/PA Archive/PA Images

Scotland facing a ‘cultural catastrophe’ with £1.7bn drop in creative industry GVA

Scotland’s creative industry is facing a 39 per cent drop in gross valued added (GVA) and could lose more than 7,000 creative jobs due to the impact of COVID-19 and lockdown.

Research by Oxford Economics has revealed overall the UK creative sector will be hit twice as hard as the wider economy in 2020, with a projected combined revenue drop of £74bn.

The report, titled The Projected Economic Impact of Covid-19 on the UK Creative Industries, found the sector was facing “a projected GVA shortfall of £29bn”. GVA measures the contribution to the economy of each sector and is used in the estimation of GDP.

It found some sub-sectors could lose more than half of their revenue and over half of their workforce, despite the Job Retention Scheme, as it projects that 119,000 permanent creative workers will be made redundant by the end of the year.

In Scotland, creative industries employ 122,000 people and were previously growing six times the rate of the wider Scottish economy. The report projected the sector in Scotland will lost £1.7bn in GVA, or 39 per cent, “the largest percentage drop in the UK”.

With the Edinburgh Festival Fringe cancelled for the first time in its 73-year history, Fringe Society chief executive Shona McCarthy said the social and cultural loss was “almost incalculable”.

“The Fringe is directly responsible for nearly 3,000 jobs and contributes around £173m a year to the Scottish economy,” McCarthy said.

“We estimate the direct financial hit to Fringe venues and companies to be at least £21m, with many of these individuals and organisations receiving little or no public subsidy.

“The Fringe has long been a global arts market for all of the UK, and a melting pot for great work to be made, showcased and picked up for touring all over the world, and that’s why (alongside our partners in the Creative Industries Federation) we are calling on UK Government to take immediate action to safeguard one of our most important industries.”

The Creative Industries Federation (CIF) has written to the UK Government calling for urgent funding for the creative sector. The letter was signed by more than 500 leading figures in the industry.

CIF chief executive Caroline Norbury said the report “makes clear is that, without additional government support, we are heading for a cultural catastrophe”.

“If nothing is done, thousands of world-leading creative businesses are set to close their doors, hundreds of thousands of jobs will be lost and billions will be lost to our economy. The repercussions would have a devastating and irreversible effect on our country,” she said.

“We urgently need a cultural renewal fund for those in the creative sector who will be hit hardest, including those industries who will be latest to return to work, those businesses unable to operate fully whilst maintaining social distancing and those creative professionals who continue to fall through the gaps of government support measures.

“We must also avoid a cliff edge on vital measures such as the Job Retention Scheme and the Self-Employed Income Support Scheme, which have been a financial lifeline for many parts of the creative industries and cannot be cut off overnight. 

“It is time to both imagine and engineer our future. We will need our creative industries to do that. They are too important to ignore.”

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