Seventh Report - Grassroots music venues

The government's response

What the committee recommended 16

1. 1
   Grassroots music venues and the live music ecosystem face a deep crisis of decline. Conclusion · paragraph 19
2. 2
   Launch a fan-led review of the live and electronic music ecosystem by summer 2024. Recommendation · paragraph 23
3. 3
   Voluntary levy on arena and stadium tickets offers a feasible immediate solution for grassroots music. Conclusion · paragraph 40
4. 4
   Introduce a voluntary levy on arena and stadium tickets by September 2024 to support grassroots venues. Recommendation · paragraph 41
5. 5
   Publish an assessment of the voluntary levy's effectiveness on grassroots music venues within 12 months. Recommendation · paragraph 42

See all 16 recommendations and conclusions

Sources

• Seventh Report - Grassroots music venues ↗The committee's report, HC 527, parliament.uk
• 3rd Special Report - Grassroots music venues: Government response ↗The government's response, 14 November 2024, parliament.uk

Recommendations and conclusions 16

1. 1
   Grassroots music venues and the live music ecosystem face a deep crisis of decline. Conclusion · paragraph 19 · addressed to Department for Culture, Media and Sport Conclusion (the committee's words)

   The crisis affecting grassroots music venues and the broader live music ecosystem, including artists, promoters and festivals, is of deep concern to music lovers, local communities and all those who depend on the sector’s economic and cultural success. We also recognise and share concerns that these issues are affecting the broader night-time venues that host music, including clubs and electronic music spaces. These sectors must not be allowed to continue to decline, but the current support is insufficient to prevent this.
2. 2
   Launch a fan-led review of the live and electronic music ecosystem by summer 2024. Recommendation · paragraph 23 · addressed to Department for Culture, Media and Sport Recommendation (the committee's words)

   While our work has focused on immediate solutions to support grassroots music, a comprehensive review of the live music ecosystem is needed to fully explore the long-term challenges and the interventions needed to protect it. We recommend that the Government launch a fan-led review of live and electronic music in the summer of 2024, to bring together all parts of the ecosystem and report within the next twelve months.
3. 3
   Voluntary levy on arena and stadium tickets offers a feasible immediate solution for grassroots music. Conclusion · paragraph 40 · addressed to Department for Culture, Media and Sport Conclusion (the committee's words)

   We are encouraged that stakeholders across the sector are taking a levy seriously and already coming together to propose solutions in good faith. While we agree with artists and managers that a compulsory levy on arena and stadium tickets would be the fairest and most sustainable mechanism to support grassroots music venues without requiring downward pressures on artists’ share of revenues, we accept that the urgency of the crisis in grassroots means that a voluntary levy is the most feasible way to have an immediate impact. If the live music sector is serious about creating an effective voluntary levy, it must be equitable for all stakeholders and in place as soon as possible.
4. 4
   Introduce a voluntary levy on arena and stadium tickets by September 2024 to support grassroots venues. Recommendation · paragraph 41 · addressed to Department for Culture, Media and Sport Recommendation (the committee's words)

   We recommend that the live music industry introduce a voluntary levy on arena and stadium tickets no later than September 2024 to support grassroots music venues, artists and promoters.
5. 5
   Publish an assessment of the voluntary levy's effectiveness on grassroots music venues within 12 months. Recommendation · paragraph 42 · addressed to Department for Culture, Media and Sport Recommendation (the committee's words)

   We further recommend that the Government should undertake and publish an assessment of the effectiveness of the voluntary levy on grassroots music venues no later than 12 months after its establishment.
6. 6
   Introduce a statutory levy if the voluntary scheme fails to support grassroots music venues. Recommendation · paragraph 43 · addressed to Department for Culture, Media and Sport Recommendation (the committee's words)

   If a voluntary levy is unable to be agreed by September 2024, or if the assessment of the voluntary levy concludes it is not collecting the income required to support the GMV sector, the Government should introduce a statutory levy at the earliest subsequent opportunity.
7. 7
   Ensure broad representation and utmost transparency for the charitable trust administering live music levy funds. Recommendation · paragraph 50 · addressed to Department for Culture, Media and Sport Recommendation (the committee's words)

   There is broad consensus that a charitable organisation is best placed to administer the levy funds. While Arts Council England is already well-established and well- placed to distribute funding, we accept that a trust led by a sector umbrella body, such as the LIVE Trust or Music Venues Trust, is the best way to collect, manage and distribute a voluntary fund. For this to succeed, we recommend that it contains Grassroots music venues 37 broad representation for all stakeholders, including venues from GMVs to arenas, artists and their business partners and national and independent promoters among its trustees. A trust must provide the utmost transparency and due diligence for its decisions to ensure it can maintain the confidence of all stakeholders within the fragile live music ecosystem.
8. 8
   Introduce a temporary, capacity-based VAT cut for grassroots music venues to stimulate activity. Recommendation · paragraph 59 · addressed to Department for Culture, Media and Sport Recommendation (the committee's words)

   A targeted and temporary cut to VAT for grassroots music venues on tickets would help to improve the immediate risk-profile of live music for promoters and in-house programmers, who take on the financial risk, and help get more shows into venues. The Government should introduce a temporary cut to VAT, based on venue capacity, to stimulate grassroots music activity and the wider economic benefits to local areas that grassroots music shows provide.
9. 9
   Undertake comprehensive economic analysis of VAT cut impact on live music, modelling different approaches. Recommendation · paragraph 60 · addressed to Department for Culture, Media and Sport Recommendation (the committee's words)

   We recognise that live music is one of many sectors calling for special treatment for VAT, and that the case for a long-term or permanent exemption requires a stronger evidence base for its economic impact than currently exists. We recommend that the Treasury and DCMS undertake a comprehensive economic analysis of the impact on a cut to VAT in line with recommendations made in this report, including modelling: a cut to a 10% rate, which is the European average, on tickets, as well as alternative approaches such as VAT on food and beverages; a targeted intervention for different sizes of venue; and the indirect impacts to VAT revenues of venue closures and a reduction in live and electronic music events.
10. 10
    Ensure future fiscal policy provides long-term certainty for GMVs, tapering any business rates relief reduction. Recommendation · paragraph 64 · addressed to Department for Culture, Media and Sport Recommendation (the committee's words)

    We welcome the Government’s decision to extend business rates relief for grassroots music venues until the end of the 24/25 billing year. However, while we understand that the conventions around Budget announcements are well-established, this continued uncertainty creates a new cliff-edge for the already precarious grassroots music sector. We recommend that Government should ensure that any future fiscal policy decisions relating to grassroots music venues gives venues certainty and long- term security. If the Treasury intends to end business rates relief for GMVs, the reduction in relief should be tapered in order to avoid an immediate shock to the sector.
11. 11
    Reduce administrative burden for live music sector when applying for public funding. Recommendation · paragraph 75 · addressed to Department for Culture, Media and Sport Recommendation (the committee's words)

    We welcome the efforts by Arts Council England to address issues resulting from the live music sector’s ability to access public funding raised in our predecessor committee’s ‘Live music’ inquiry six years ago, and indeed grassroots music venues said that ACE funding through Covid had been a lifeline. However, we are concerned that perceptions and administrative burdens remain largely the same. We recommend that the Government and Arts Council work to reduce the administrative burden of applying for public funding.
12. 12
    Frustrations persist regarding PRS for Music fees, necessitating fair tariffs for licensees. Conclusion · paragraph 88 · addressed to Department for Culture, Media and Sport Conclusion (the committee's words)

    We recognise that, in the current economic context and amidst a closure crisis, there are frustrations among venue operators and promoters with PRS for Music’s 38 Grassroots music venues fees and processes regarding licensing. We also recognise that PRS for Music has a responsibility to the songwriters, composers and music publishers it represents, and is a vital part of the music ecosystem. Songwriter rights and royalties should be protected but tariffs should be fair and terms reasonable for licensees.
13. 13
    Instruct successor committee to monitor progress of PRS for Music's Tariff Review. Recommendation · paragraph 89 · addressed to Department for Culture, Media and Sport Recommendation (the committee's words)

    The comprehensive Tariff Review, due to begin in summer 2024, is a useful opportunity to consider how concerns that have been raised with us, such as litigation, the ease of navigating processes and whether a GMV-specific tariff is feasible, can be mitigated or addressed for the next period. We recommend that our successor committee consider progress in the next Parliament.
14. 14
    Place agent of change principles on a statutory footing at the earliest opportunity. Recommendation · paragraph 95 · addressed to Department for Culture, Media and Sport Recommendation (the committee's words)

    Despite the welcome introduction of the agent of change principles, venues are still facing a widespread risk of closures due to planning and redevelopment-related issues. We recommend that the agent of change principles are put on a statutory footing at the earliest opportunity.
15. 15
    Merchandise revenues are crucial for artists' livelihoods, with GMVs committed to artist retention. Conclusion · paragraph 100 · addressed to Department for Culture, Media and Sport Conclusion (the committee's words)

    As the costs of touring have mounted and opportunities to perform live are becoming squeezed, merchandise revenues are increasingly important to sustain the livelihood of professional artists and their business partners. We welcome that grassroots music venues are committed to ensuring artists can retain all of their merchandise revenues, despite their own need for income.
16. 16
    Urge all live music venues and trade bodies to follow FAC merchandise principles. Recommendation · paragraph 101 · addressed to Department for Culture, Media and Sport Recommendation (the committee's words)

    We support the Featured Artists’ Coalition’s campaign for an end to punitive fees and its four principles on merchandise commissions, particularly given the current economic environment in which artists are trying to make a living. We call on all venues and trade bodies in the live music sector to follow the FAC’s merchandise principles.