What does the Autumn Statement mean for the arts?

Details of extended support for businesses struggling with their energy bills will be announced before the end of the year, Chancellor Jeremy Hunt has said.

Hunt made the pledge as he delivered the government’s Autumn Statement in the House of Commons today (17 November), and although no update on the support package was given during his speech, Hunt did say targeted support will be available past the initial six-month period, due to end in April.

Today’s statement contained no specific measures for the arts and culture sector, but decisions on governmental spending, business rates and wages, alongside the financial pressures hitting the sector’s audience, are set to greatly impact the sector.

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Arts Professional has taken a look at the policies and developments most likely to affect arts organisations.

Departmental spending

The August Statement says all government departments will have their Spending Review settlements for 2024-25 honoured in full.

For DCMS, this means a £2.7bn budget for 2024/25 as agreed in last year’s August Statement.

Today, Hunt said the figure comes with no cash cuts, but all departments “will be expected to work more efficiently to live within these [budgets] and support the government’s mission of fiscal discipline”.

From 2025/26 onwards, Hunt said increases in public spending will be limited to 1% a year above the rate of inflation, for the next three years.

Decisions in other government departments that may affect the arts sector include an increase to the budget for schools, which will go up by £2.3bn next year and £2.3bn the year after, taking the core schools budget to a total of £58.8bn. How this increase impacts arts education will be determined by the Department for Education.

When discussing infrastructure policy, Hunt confirmed round two of the Levelling Up Fund will go ahead, at least matching the £1.7bn value of round one.

“[The] national Conservative mission is to level up economic opportunity across the country,” Hunt said, which indicates the levelling-up agenda could remain a forefront consideration across all government policy and funding decisions.

Business rates extension

The statement included confirmation the Retail, Hospitality and Leisure Relief on Business Rates will be extended from 50% to 75% from April next year.

With this rate applicable to venues with values of below £110,000, many arts organisations are set to benefit from the extension, including most grassroots music venues.

While welcoming the decision, CEO and Founder of the Music Venue Trust Mark Davyd has called for further clarity on the support available to venues above the £110,000 threshold.

Davyd also noted the statement did not include a commitment to reducing VAT levels on ticketing.

“The UK continues to have the highest rate of VAT in Europe on live music tickets. This must change so the UK can compete,” he said.

Elsewhere, Hunt confirmed the National Living Wage for people over 23 will increase in April, from £9.50 to £10.42 an hour. This equates to a 9% rise, marking the policy’s largest ever cash increase. The government estimates this will give a full-time worker a pay rise of over £1,600, benefitting two million of the lowest paid workers.

With unemployment levels rising, those on Universal Credit will be targeted with Hunt setting out the goal of an extra 600,000 job seekers to meet with a work coach to help find work.

Impact on arts audiences

Arts organisations will be wary that the current economic climate means many of their audiences will be forced to tighten their pursestrings.

Amid Hunt’s financial plans came confirmation the UK is in a recession, though the Chancellor has predicted it will be “shallow and short”.

The UK’s Office for Budget Responsibility (OBR) report published today estimates real household disposable income per person is to fall by more than 7% over the next two years.

This decrease would equate to the biggest fall on record and would take income down to 2013 levels.

A decline in household disposable income will almost definitely impact the amount audiences spend on arts and culture.

With many arts organisations still recovering from the pandemic and the majority now grappling with rising energy bills and the cost-of-living crisis, the latest challenge could become retaining support from audience members at a time of heightened financial pressures.