Business growth: Brands spending more
In the Budget 2015, Chancellor George Osborne announced that the UK economy grew 2.6% in 2014, which, although lower than predicted, was a figure higher than any other advanced economy. Further growth of 2.5% has been forecast for 2015.
By-and-large, the UK event industry is reaping the benefits of this positive economic landscape. Jon Salthouse, creative director of new entertainment agency Tempo Live, said: "Business is growing at an exciting pace and this is partially due to the upturn in economy. Brands are beginning to spend more on budgets as they face a financially secure future.
"Not only that but brands are keen to spend their budgets in new and exciting ways."
Tom Eatenton, chief executive of Kru Live, agreed. "Recent conversations I have had with colleagues in various industries are positive and sentiment is good economically across board," he said. "Within our sector we are certainly seeing positivity and growth, too. Conversations with those in the top tier media agencies has also indicated a definite increase of budget steered towards live, which has to be good news for our sector."
Future growth?
A rise in experiential interest from clients signifies that this upswing in the industry will continue into this year and the next, explained PS Live’s managing director Michael Brown. "The outlook seems very positive at this stage," he said. "I could not gauge if such positivity accurately reflects the rest of the market, but we are certainly fielding a lot of new business enquiries, which we assume extend to our competitive set.
"This would seem to suggest that the appetite for experiential will be undiminished next year so I think we can afford to be optimistic at this stage in the year."
The global picture
Julian Pullan, president, EMEA, of Jack Morton Worldwide, added: "It’s great to see growth in the UK economy, but we are still operating in a very tough economic climate globally, particularly in the Eurozone.
"For many of us in this industry, our work spans the globe, so we are impacted by the economy in every market in which we operate and the highs and lows that come with that. So, while these figures are very encouraging, we have to view them as part of a broader global picture."
Rising wages
The coalition also announced a rise in the minimum wage for adults to £6.70. For many event profs at agency level, this change in payment law will not change much, as Jason Collins-Down of Creventive explained: "Most people, especially freelancers, in the industry can negotiate a good payment above the minimum wage in the bottom and top of the industry.
"Especially in creative, production and management roles, it’s all about ability and experience – companies are prepared to pay well for that."
Marco Forgione, chief executive of association EVCOM, highlighted that although minimum wage rises may not affect the event industry, the rise in apprenticeship wages is good news. "Apprenticeships are transformative," he said. "As well as opening up apprenticeships to more people at different stages of their lives, it is essential that apprenticeships are an attractive option."
Yet in the promotional and staffing world, the announcement does hold some weight. Chris Wareham, managing director of Mash Staffing, said: "The standard wage for promotional staff has stayed the same for as long as most people can remember - we've been in the industry for 10 years and it's remained pretty consistent during that time. We maintain a minimum pay to our staff and know we have a reputation for paying fairly and well above London Living wage.
"However, nowadays that rate doesn't go as far as it used to in comparison to the increased minimum wage - which means staff will naturally leave the industry in favour of more lucrative work, particularly those living in London and the South-East."
However Jack Edwards, co-founder of new promotional agency JE Events, said a rise in the wage should attract more talent into the industry. Speaking from experience, he explained: "Having worked in the field for eight years each before founding JE Events, myself and my co-founder have worked all the jobs out there in the promo industry.
"From leafleting to being an event manager’s driver, you certainly have to earn your strips in the promo world before you can progress onto team leading and event managing. So the minimum wage rising is a great addition to the 2015 budget for people just starting out."
The ignored creative industry?
Yet, despite a buoyant market, there is an air of disappointment in the industry. While Osborne praised the creative industries as "a huge contributor to the British economy", he has only offered up generous tax credits to the TV and film industries, as well as orchestras, while the event industry is left unaided.
"Yet again the government has failed to appreciate the range and extent of the UK’s creative industries," lamented Forgione. "We are the global centre of excellence in live, film and digital corporate communication – a sector valued at over £40 billion to the UK economy yet there has been no direct support.
"We attract significant inward spend as well as export success. An extension of the tax credits to our sector would provide a substantial boost to our world leading industry."
"I feel the event industry is often ignored and undervalued by the government, especially when it comes to tax," agreed Edwards. "I think tax credits would certainly benefit all who work in the promo industry, which of course is a very creative industry."
Yet Wareham said he remains positive that the industry won't go without help. He said: "The event industry is so closely linked to the creative industry that during the development of campaigns there will be elements that will be eligible for tax credits. I'm sure it will be able to benefit in some way."
Other changes for the events industry:
- The announcement of eight new ‘Enterprise zones’
- End-of-year tax returns to be scrapped in favour of online accounts in 2020
- A promised reform of business rates
- A new ‘Diverted profits’ tax aimed at multinationals that shift profits offshore
- A £7bn investment in transport investment in the south west, including a new intercity express rail franchise
How will the budget affect your business? Comment below to let us know what you think.
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