UK 2020: Cultural Institutions, Art Market and Creative Industries under Threat

by Claudia S. Quiñones Vilá

The UK has faced a plethora of problems this spring which have had a profound effect on the art market and on its culture industry in general. First, Brexit became official on January 31, 2020 – heralding a potential downturn as EU countries jostle for art market dominance on the continent.

Second, the newly implemented anti-money laundering regulations, which now affect art market participants, have left many uncertain as to their compliance obligations. Third, an appeal for judicial review of the Ivory Act was denied, leaving museums and dealers uncertain as to whether they will be able to sell ivory items in their collections. Finally, not long after, the spread of COVID-19 prompted a shutdown of all non-essential services, including arts and cultural organizations, theaters, auction houses, and galleries. 

Source: Artnet News

To date, it is estimated that the UK’s creative industries face a potential £74 billion shortfall in earnings and massive unemployment in the coming months; a veritable “cultural catastrophe.” According to a report by Oxford Economics, as many as one in five creative jobs are threatened and there is an anticipated revenue drop equivalent to £1.4 billion weekly over a one-year period, making the sector twice as vulnerable as the wider UK economy. In April 2020, over 400 artists and cultural figures signed an open letter addressed to UK chancellor Rishi Sunak and culture secretary Oliver Dowden, asking them to implement urgent funding for cultural and creative organizations impacted by COVID-19. The letter indicated that existing bailout provisions were inadequate and did not cover all creative industries and professionals, notably freelancers. Previously in March 2020, Arts Council England (ACE) had launched a £160 million emergency relief package for artists and arts organizations, attempting to bridge the gap between the existing government bailout package for individuals and the needs of “gig economy” workers. While ACE’s package provided much-needed assistance, in the long term the arts and culture sector requires a greater stimulus in order to survive. 

In response to ongoing concerns, on July 6, 2020 the UK government announced that it would issue a £1.57 billion rescue package for its cultural and heritage institutions to “help safeguard the sector for future generations, ensuring art groups and venues across the U.K. can stay afloat and support their staff whilst their doors remain closed and curtains remain down.” This includes a £188 million lifeline for organizations in Northern Ireland, Scotland, and Wales. The announcement was made a few days after museums across the country were given authorization to open to the public, albeit with social distancing measures in place. However, a recent survey found that nearly 50% of respondents felt uncomfortable visiting art institutions now, compared to 17% in May 2020. This is certainly a change from concerns expressed in December 2019 that museums had become hopelessly overcrowded, more akin to nightclubs than cultural institutions, and will certainly have a negative effect on museums hoping to recoup their closure-related losses. 

Source: Business Insider

Furthermore, prior to the COVID-19 outbreak, 74% of arts organizations in the UK had their funding slashed despite contributing more to the local economy than agriculture and Sunak’s claim that they serve as “the lifeblood of British culture.” National Campaign for the Arts (NCA) published an Arts Index indicating changes in funding to such institutions over the past decade. It found that public investment has decreased by 35% overall, while earned income rose by 47%. This reliance on attendance-driven revenue schemes helps explain why the arts and culture sector is in such dire straits as a result of the pandemic. Previously, Arts Council England reported that the cultural industries sector directly added £10.8 billion to the country’s GDP in 2016, with an overall contribution of approximately £23 billion including related taxation, employment, and supply chains. Arts and culture was also the fastest-growing sector of the economy, at five times the rate of other sectors. By 2018, its contribution had risen to an impressive £111.7 billion. The pandemic has made it clear that this sector, especially freelance workers and artists, is vastly underserved by the UK government. This contrasts with Germany, whose federal government approved a €50 billion aid package in March 2020 specifically for small businesses and freelancers, encompassing the cultural, creative, and media sectors. Unlike the UK, the German initiative extends unemployment benefits to freelancers, although the application process has been described as needlessly bureaucratic and complicated. 

It seems inevitable that the global economy is headed for a recession, pulling the UK’s creative industries and cultural institutions along with it. In the absence of sufficient government aid, institutions such as The Globe Theatre have taken the lead and appealed to the public directly for donations to stay afloat. Others, such as the trade body UK Theater, have created their own funds to help those in need. Even Netflix has stepped in, making a £500,000 donation to UK Theater. Caroline Norbury of the Creative Industries Federation has advocated for a cultural renewal fund in order to support struggling businesses and combat redundancies and lost revenue. This would help support those institutions that do not qualify for emergency funding or possess diverse income streams. Migrating content online, carrying out commercial activities and visitor engagement through the digital sphere, learning how to do “less with less,” providing greater incentives from smaller regional museums, and advocating for a reframing of the cultural sector as essential for the national economy are all ways in which this situation may be remedied. As cultural institutions gradually reopen in the coming weeks and the UK negotiates its new normal, it is imperative to keep in mind the essential functions of arts and culture, not only in the monetary sense, but also for sustainable development and quality of life. The government bailout is the first step towards acknowledging the vital importance of the creative industries and cultural institutions for the country, but the UK should commit to this vision long-term in order to ensure that its culture thrives, rather than merely survives. 

Claudia S. Quiñones Vilá is a licensed attorney in New York and Puerto Rico with professional experience in civil and international law, including art and cultural heritage law. Her areas of expertise include the art market, private collections, EU cultural heritage, repatriation of antiquities, sustainable development, urban law, and public policy. She currently works as an associate at Amineddoleh & Associates, a leading NYC boutique law firm focusing on art and cultural heritage disputes for high-profile clients, including the Cultural Ministry of Greece and the Cultural Ministry of Italy. She also works with Constantine Cannon LLP in London as part of the art practice group, serves as language editor for the Santander Art and Culture Law Review (SAACLR), and is a member of the TIAMSA Legal Group.