At Risk: Our Creative Future: House of Lords Communications and Digital Committee 2nd Report of Session 2022-23

HOUSE OF LORDS
Communications and Digital Committee
2nd Report of Session 2022–23
At risk: our creative

future
Ordered to be printed 10 January 2023 and published 17 January 2023
Published by the Authority of the House of Lords
HL Paper 125
Communications and Digital Committee
The Communications and Digital Committee is appointed by the House of Lords in each
session “to consider the media, digital and the creative industries and highlight areas of concern
to Parliament and the public”.
Membership
The Members of the Communications and Digital Committee are:
Baroness Bull Lord Lipsey
Baroness Featherstone Baroness Rebuck
Lord Foster of Bath Baroness Stowell of Beeston (Chair)
Lord Griffiths of Burry Port Lord Vaizey of Didcot
Lord Hall of Birkenhead The Lord Bishop of Worcester
Baroness Harding of Winscombe Lord Young of Norwood Green
Declaration of interests
See Appendix 1.
A full list of Members’ interests can be found in the Register of Lords’ Interests:
http://www.parliament.uk/mps-lords-and-offices/standards-and-interests/register-of-lords-
interests
Publications
All publications of the Committee are available at:
https://committees.parliament.uk/committee/170/communications-and-digital-committee/
publications/
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Live coverage of debates and public sessions of the Committee’s meetings are available at:
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Further information
Further information about the House of Lords and its Committees, including guidance to
witnesses, details of current inquiries and forthcoming meetings is available at:
http://www.parliament.uk/business/lords
Committee staff
The staff who worked on this inquiry were Daniel Schlappa (Clerk), Emily Bailey Page (Policy
Analyst) and Rita Cohen (Committee Operations Officer).
Contact details
All correspondence should be addressed to the Communications and Digital Committee,
Committee Office, House of Lords, London SW1A 0PW. Telephone 020 7219 2922. Email
[email protected]
Twitter
You can follow the Committee on Twitter: @LordsCommsCom.
CONTENTS
Page
Summary 3
Chapter 1: The case for action 7
Our inquiry 7
The importance of creative industries 7
Figure 1: Top ten exporters of creative services worldwide in 2020 8
Figure 2: Top ten exporters of creative goods worldwide in 2020 9
Rising competition and the risk of complacency 10
The need for change 11
Chapter 2: A digital future 14
Overview 14
Text and data mining 14
Securing performers’ rights 16
Intellectual property and international trade 18
AI and jobs 19
Chapter 3: Improving the business environment 22
Creative Industries Clusters Programme 22
Box 1: UKRI’s Creative Industries Clusters Programme 23
Tax relief and innovation 25
Box 2: Definitions of R&D eligible for tax relief 26
Government action 26
Tax relief and international competition 27
Practical support for SMEs 29
Access to capital 29
Business guidance 30
Access to space 32
Supporting innovation in institutions and organisations receiving
public funding 33
Chapter 4: Skills 35
Identifying skills shortages and the data gap 35
Pre-16 education 37
Careers guidance 37
Figure 3: Gatsby Benchmarks 38
Creativity in school 40
Figure 4: Design and technology GCSE entries since 2010 41
Post-16 education 42
T Levels 44
Apprenticeships 45
Higher education 45
Lifelong learning 47
Improved coordination 48
Summary of conclusions and recommendations 50
Appendix 1: List of Members and declarations of interest 55
Appendix 2: List of witnesses 57
Appendix 3: Call for evidence 63
Appendix 4: Note of visit to StoryFutures 66
Appendix 5: Glossary of key terms 67
Evidence is published online at https://committees.parliament.uk/

work/6881/a-creative-future/publications/ and available for inspection at
the Parliamentary Archives (020 7219 3074).
Q in footnotes refers to a question in oral evidence.

At risk: our creative future 3
SUMMARY
The creative industries rank among the world’s fastest-growing sectors. They
provide high-quality employment, drive innovation, and support civic and social
wellbeing. According to the Government, in recent years they have generated
more value to the UK economy than the life sciences, aerospace and automotive
industries combined. Much of the growth potential lies in areas that combine
technology with creativity.
The sector has benefited from some Government attention in recent years. Tax
reliefs, investment programmes, skills initiatives and pandemic recovery funds
have all been widely praised.
But the Government’s current approach is complacent and risks jeopardising the
sector’s commercial potential. Indeed, the creative industries scarcely featured
in the 2022 Autumn Statement and were not included in the Government’s
five priorities for growth. This lack of focus risks affecting the UK’s future
prosperity, especially at a time of rising international competition in the sector
and domestic economic challenges.
Championing the creative industries is not a matter of special pleading. There
is a serious and well evidenced business case for the sector to sit at the heart of
the UK’s future growth plans.
To unlock the sector’s full potential, ministers must devote serious attention to
fixing a policy landscape characterised by incoherence and barriers to success.
The creative industries rank amongst the most innovative sectors in the country,
but UK tax relief for research and development remains restrictive and does not
reflect where innovation comes from in the sector. The UK business environment
lacks sufficient incentives for small businesses to scale at home; too many sell up
and valuable intellectual property (IP) moves overseas. New proposals to relax
IP laws risk undermining creative sector business models, and do not even enjoy
the support of the creative industries minister in the Department for Digital,
Culture, Media and Sport (DCMS). Trade negotiations are putting the UK’s
‘gold standard’ copyright regime at risk.
Data collection in both Government and the sector is muddled and under
exploited. Academic research funding does too little to encourage commercially
orientated creative projects; it skews towards collaborations with large businesses
rather than the small firms that characterise the creative sector. We remain
perplexed as to why UK Research and Innovation is choosing not to continue
one of its most successful interventions, the Creative Industries Clusters
Programme, even as other new initiatives are being set up.
Successive governments’ efforts to address skills shortages have fallen far short
of what is needed. The English education system equips pupils poorly for the
realities of future work, in particular the freelance market. Technical skills
shortages are widespread. Opportunities to encourage students to develop a
valuable blend of creative and digital skills are being missed. Careers guidance
about the sector remains patchy and poor. Skills policies have led to an over-
abundance of courses (more than 100,000 are listed on the national careers
website) but too few opportunities to develop the types of skills employers say
they want. There have been 35 ministers responsible for skills in the past 25
years, which is hardly conducive to long-term stability.
4 At risk: our creative future
Creative sector organisations receiving public funding also face a challenging

future. Many are struggling to adapt to the rapid pace of technological change.
Funding streams are disparate and complex; integrating good practice remains
challenging; and the stop-start nature of grants makes it hard to support cross-
disciplinary collaboration or help shift business models towards long‑term
financial sustainability. A greater focus on innovation, collaboration and
sustainability will be key to their long-term success.
Ministerial engagement with international opportunities appears to be declining.
The Government is reportedly absent at key global gatherings such as the World
Conference on the Creative Economy, while cuts to the British Council hamper
opportunities to build profitable overseas networks. Several witnesses told us
the UK was a world leader when it defined the concept of the creative industries
over two decades ago. Such leadership is now being left to others.
The Government’s new Sector Vision will therefore be very welcome. This
should help ministers identify priorities and make difficult choices about the
allocation of scarce resources. It should also help those across the creative sector
realise the full commercial potential of their work.
But a plan on its own will be insufficient. Better cross-departmental collaboration
will be key to its success. Unless senior figures across the Government start
taking the creative industries more seriously, the fundamentals that underpin
the sector’s success will deteriorate and the UK’s competitiveness will decline.
In some areas this process has already begun.
We therefore recommend the following priority areas for attention:
• Recognise our strengths: The creative industries are an economic

powerhouse. The Government should commit to making them a key
feature of its future growth plan, and explain why they were omitted from
its recent list of priority sectors with high growth potential.
• Protect IP: The Intellectual Property Office must change its proposed
approach to text and data mining to avoid undercutting creative industries
business models. The Government should also commit to maintaining
and promoting the UK’s IP standards in trade deals.
• Fund what works: UKRI should work with DCMS and the Department for
Business, Energy and Industrial Strategy to ensure the Creative Industries
Clusters Programme can continue beyond March 2023. Discontinuing
support would be a needless waste of a programme that is exceeding co-
investment expectations by 600 per cent.
• Boost innovation: HM Treasury should change its approach to the R&D
tax relief system to include innovation in the arts. It should undertake and
publish a comprehensive review of the options. Relatedly, the Government’s
review of audiovisual tax reliefs must benchmark the UK against
international counterparts to address declining UK competitiveness.
• Address blind spots in education: over the next decade there will be a
huge demand for workers with a blend of digital and creative skills. The
Department for Education needs to wake up to this reality. It should
start by addressing the major decline in Design and Technology GCSEs,
and improving careers guidance. Lazy rhetoric about ‘low value’ arts
courses risks deterring much needed talent from pursuing education and
careers in the sector. The Department should further address barriers

to apprenticeships in the creative sector and promote the new flexi-job
apprenticeship scheme more widely.
• Follow the data: future priorities—from further education course content
through to lifelong learning entitlements and careers guidance—need to
be informed by up-to-date market data and long-term forecasts of skills
shortages. The new Unit for Future Skills should play a central role in
providing this information.
• Support adaptation: DCMS should publish a forward-looking plan to help
the sector adapt to technological disruption and change, with a particular
focus on those on low incomes working in the creative industries.
Terms and definitions

Key terms
• The terms ‘creative industries’ and ‘creative sector’ refer to the DCMS
definition of industries “which have their origin in individual creativity,
skill and talent and which have a potential for wealth and job creation
through the generation and exploitation of intellectual property”.1 Nine
subsectors fall under this definition:
• music, performing and visual arts;
• museums, galleries and libraries;
• publishing;
• IT, software and computer services;
• film, TV, video, radio and photography;
• design and designer fashion;
• crafts;
• architecture; and
• advertising and marketing.
• Our inquiry engaged with a selection of the above: music, performing and
visual arts; museums and galleries; publishing; gaming, film, TV, video,
photography; and digital and design services.
• The term ‘creative occupations’ refers to jobs that are creative in
nature according to the DCMS creative industries economic estimates
methodology.2
• The term ‘creative economy’ includes both creative and non-creative
occupations within the creative industries, as well as those working in
creative occupations in other sectors (for example a marketing professional
working in financial services).
1 DCMS, ‘Sector Estimates Methodology’ (2021): https://www.gov.uk/government/publications/

dcms-sectors-economic-estimates-methodology/dcms-sector-economic-estimates-methodology
[accessed 24 November 2022]
2 DCMS, Creative Industries Economic Estimates Methodology (2016), p 6: https://assets.publishing.
ser vice.gov.uk /government /uploads/system /uploads/attachment_data /f ile/499683/CIEE _
Methodology.pdf [accessed 24 November 2022]
At risk: our creative future
Chapter 1: THE CASE FOR ACTION
Our inquiry
1. The creative industries rank among the world’s fastest-growing sectors.3
They provide high-quality employment, drive innovation, and support civic
and social wellbeing.
2. The UK is widely regarded as a leader in the creative sector, both in terms of
economic potential and global cultural influence. But this success cannot be
taken for granted in the context of rising competition and rapid technological
development. We launched this inquiry to identify the actions required from
the Government and industry to help the UK’s creative industries thrive in
the face of possible disruption and displacement by new technologies and
fast-moving international competitors over the next 5–10 years.
3. We did not seek to cover all the issues affecting the sector. Other reports ably
cover issues such as domestic and international migration trends;4 diversity
and inclusion;5 employment practices;6 and the details of public funding
allocations for arts organisations.7
4. We took evidence from a range of witnesses and visited StoryFutures, which
is part of the Creative Industries Clusters Programme.8 Our report builds
on a wealth of previous studies and recommendations.9 Our findings are
not exhaustive. We hope they will support the Government and industry to
prioritise and address the most pressing issues in the years ahead.
The importance of creative industries

5. Our evidence was clear that the creative industries should be a key part of
the UK’s plan for economic growth. More than one in eight UK businesses
are part of the creative industries, according to 2019 figures.10 The sector
3 United Nations Conference on Trade and Development, ‘Creative Economy Outlook 2022’ (October
2022): https://unctad.org/webflyer/creative-economy-outlook-2022 [accessed 1 December 2022]
4 Creative Industries Policy and Evidence Centre, ‘The migrant and skills needs of creative businesses
in the UK’ (July 2019): https://pec.ac.uk/research-reports/the-migrant-and-skills-needs-of-creative-
businesses-in-the-united-kingdom [accessed 1 December 2022]
5 All-Party Parliamentary Group for Creative Diversity, What works (September 2021): https://www.kcl.
ac.uk/cultural/resources/reports/creative-majority-report-v2.pdf [accessed 1 December 2022]
6 Creative Industries Policy and Evidence Centre, ‘Good Work Review’ (March 2022): https://pec.
ac.uk/news/good-work [accessed 24 November 2022]
7 See Arts Council England, ‘2023–26 investment programme’: https://www.artscouncil.org.uk/
investment23 [accessed 24 November 2022).
8 Creative Industries Clusters Programme, ‘StoryFutures’: https://creativeindustriesclusters.com/
clusters/storyfutures/ [accessed 1 December 2022]
9 See for example the Digital, Culture, Media and Sport Committee, Reimagining where we live: cultural
placemaking and the levelling up agenda (Third Report, Session 2022–23); Department for Digital,
Culture, Media and Sport (DCMS), ‘Independent Review of the Creative Industries’ (September
2017): https://www.gov.uk/government/publications/independent-review-of-the-creative-industries
[accessed 1 December 2022]; DCMS, ‘Culture is Digital’ (March 2018): https://www.gov.uk/
government/publications/culture-is-digital [accessed 1 December 2022] and Creative UK, the UK
creative industries (2021): https://drive.google.com/file/d/118K7yiift1cTosufulxa1NxcYLKAzjuU/view
[accessed 1 December 2022].
10 DCMS, ‘DCMS Sectors Economic Estimates 2019’ (October 2021): https://www.gov.uk/government/
statistics/dcms-sectors-economic-estimates-2019-business-demographics [accessed 1 December
2022]
accounted for £115.9 billion—almost 6 per cent of the UK’s entire Gross
Value Added—in the same year.11 This was more than the aerospace,
automotive and life sciences industries combined.12 Recent figures indicate
many subsectors are rapidly bouncing back from the pandemic downturn.13
6. Between 2011 and 2019, job growth in the creative industries was three times
that in the UK overall.14 Ed Shedd, a Partner in Technology, Media and
Telecommunications at Deloitte, summarised the sector’s growth potential:
“two million jobs that the creative sector generated in 2010… three million
jobs it generated in 2018–19… four million jobs in the creative services sector
[forecast for 2030].”15
7. The creative industries are receiving growing international attention. Global
exports of creative services rose from $487 billion in 2010 to $1.1 trillion in
2020, while goods exports totalled $524 billion in 2020.16 Countries across
the world are seeking to capture a greater proportion of these opportunities.17
Figure 1: Top ten exporters of creative services worldwide in 2020
United States 206

Ireland 174
Germany 75
China 59
United Kingdom 57
Japan 47
Netherlands 46
France 32
Switzerland 26
Sweden 26
0 50 100 150 200 250
(US$ billion)
Source: United Nations Conference on Trade and Development, Creative Economy Outlook 2022 (October 2022),
p 51: https://unctad.org/system/files/official-document/ ditctsce2022d1 en.pdf [accessed 1 December 2022]
11 DCMS, ‘National statistics: DCMS Economic Estimates 2019 (provisional): Gross Value Added’
(February 2021): https://www.gov.uk/government/statistics/dcms-economic-estimates-2019-gross-
value-added/dcms-economic-estimates-2019-provisional-gross-value-added [accessed 1 December
2022]. Note that there is some overlap between DCMS accounting of Gross Value Added between
creative industries and other sectors such as Digital.
12 Creative Industries Policy and Evidence Centre, ‘How lessons from UKRI’s Creative Industries
Challenge Programmes should transform the way we invest in R&D’ (14 February 2022): https://pec.
ac.uk/blog/transforming-investment-in-r-d [accessed 30 November 2022]
13 Creative Industries Council, ‘Positive Trend In Economic Recovery Of UK Creative Industries From
Pandemic’ (May 2022): https://www.thecreativeindustries.co.uk/facts-figures/positive-trend-in-gva-
of-uk-creative-industries-from-pandemic [accessed 1 December 2022]. See also DCMS, ‘Using
annual estimates from summed monthly GVA data’ (October 2022): https://www.gov.uk/government/
statistics/dcms-sectors-economic-estimates-monthly-gva-to-june-2022/using-annual-estimates-
from-summed-monthly-gva-data [accessed 1 December 2022]
14 House of Lords Library, ‘Impact of government policy on the creative sector’ (28 October 2021):
https://lordslibrary.parliament.uk/impact-of-government-policy-on-the-creative-sector/
15 Q2
16 This equates to circa £399.5 billion; £902.3 billion; and £430 billion respectively as of 8 December
2022.
17 United Nations Conference on Trade and Development, Creative Economy Outlook 2022 (October
2022), p 3: https://unctad.org/system/files/official-document/ditctsce2022d1_en.pdf [accessed
1 December 2022]
Figure 2: Top ten exporters of creative goods worldwide in 2020
China 169
United States 32
Italy 27
Germany 26
Hong Kong SAR 24
France 21
United Kingdom 15
Viet Nam 14
Republic of Korea 14
India 14
0 50 100 150 200
(US$ billion)
Source: United Nations Conference on Trade and Development, Creative Economy Outlook 2022, p 37
8. We heard that the creative sector is well suited to delivering on Government

priorities. Its growth rate has consistently outpaced that of the general
economy.18 Creative sector businesses are addressing net zero challenges by
driving innovation in concept design, material sciences and construction.19
Its job market offers a range of rewarding roles with many vocational entry
routes. Clusters of creative businesses are located across the country, which
supports the levelling up agenda.20 Numerous reports set out in detail the
sector’s domestic and international economic vibrancy,21 positive spillover
potential,22 job creation,23 geographical distribution24 and civic value
contributions.25
9. Much of the growth potential lies in subsectors that combine technology with
creativity. We heard that the UK’s strengths here are particularly striking.
The UK’s gaming market is worth £7 billion alone,26 with a productivity rate
18 DCMS, ‘UK’s Creative Industries contributes almost £13 million to the UK economy every hour’
(February 2020): https://www.gov.uk/government/news/uks-creative-industries-contributes-almost-
13-million-to-the-uk-economy-every-hour [accessed 4 December 2022]
19 Written evidence from HM Government—Department for Digital, Culture, Media and Sport
(CRF0058)
20 Creative Industries Policy and Evidence Centre, ‘Levelling Up and the Creative Industries: Resources
for Local Authorities’ (June 2022): https://pec.ac.uk/news/levelling-up-info-for-local-authorities
[accessed 4 December 2022]
21 United Nations Conference on Trade and Development, Creative Economy Outlook 2022 (October 2022):
https://unctad.org/system/files/official-document/ditctsce2022d1_en.pdf [accessed 1 December
2022]
22 DCMS, ‘Creative industries spillovers: research findings’ (July 2022): https://www.gov.uk/government/
publications/creative-industries-spillovers-research-findings [accessed 1 December 2022]
23 Creative Industries Council, ‘Invest In Creativity For 300,000 New Jobs, Report Advises’ (July
2021): https://www.thecreativeindustries.co.uk/site-content/300-000-new-creative-industry-jobs-in-
recovery-with-right-investment-report-estimates [accessed 1 December 2022]
24 Creative Industries Policy and Evidence Centre, ‘Small engines of growth’ (November 2020): https://
pec.ac.uk /news/small-engines-of-growth-new-research-finds-over-700-small-communities-of-
creative-businesses-in-cities-towns-and-villages-across-the-uk-1 [accessed 1 December 2022]
25 UKRI, Understanding the value of arts & culture, the AHRC cultural value project (November 2021):
https://www.ukri.org/wp-content/uploads/2021/11/AHRC-291121-UnderstandingTheValueOfArts-
CulturalValueProjectReport.pdf [accessed 1 December 2022]
26 Ukie, ‘UK Consumer Games Market Valuation 2021’ (March 2022): https://ukie.org.uk/consumer-
games-market-valuation-2021 [accessed 4 December 2022]
that is reportedly twice the UK average.27 The film and high-end television
industry saw a record £5.64 billion spent on production in the UK in 2021,28
while the royalties earned from the exploitation of intellectual property are
worth billions.29 The UK’s animation and visual effects industry enjoys
international acclaim.30 Only the US and China are ahead of the UK in
the number of artificial intelligence research publications relating to the
creative industries.31 There were over 2,000 UK firms working on immersive
technologies in 2021, a rise of 83 per cent over five years.32 PwC has estimated
that virtual reality technologies will add £62.5 billion to the UK economy by
2030; much of the design input will come from the creative sector.33
10. The UK has competitive advantages in organisations and institutions
receiving public funding too. The British Museum, the National Gallery
and the Natural History Museum have been ranked among the top 10 most
visited museums in the world.34 Practitioners and analysts from Canada
to South Korea have praised the UK’s innovative approaches to engaging
with the future of arts and culture.35 Professor Hye-Kung Lee, Professor
of Cultural Policy at King’s College London, told us the UK was globally
recognised for its leadership in the “quality of cultural content”.36 UK public
service broadcasters are known across the world for producing high-quality
content that delivers public value alongside regional economic benefits.37
Rising competition and the risk of complacency

11. Yet we heard mounting concern that the UK’s success was being taken for
granted, and increasingly at risk.38 Rapid technological advances are changing
the nature of the creative industries, and international competition is rising.
Many UK initiatives—particularly fiscal incentives, public arts programmes,
centres of excellence and the development of high-end production centres—
are being copied and improved on by governments abroad.39 The screen
industries face growing challenges from overseas competition and rising
domestic production costs.40 Skills shortages and a lack of investment
27 Written evidence from Ukie (CRF0025)

28 British Film Institute, ‘Official 2021 BFI statistics reveal a record £5.64 billion film and high-end
TV production spend in the UK’: https://www.bfi.org.uk/news/official-2021-bfi-statistics [accessed
23 November 2022]
29 British Film Institute, BFI Statistical Yearbook (2021), p 210: https://www.bfi.org.uk/industry-data-
insights/statistical-yearbook [accessed 12 December 2022]
30 Animation UK, ‘The UK’s animation sector’ (2022): https://www.animationuk.org/subpages/the-
uks-animation-sector-in-profile/ [accessed 1 December 2022]
31 Figures based on 2019 data. See Creative Industries Policy and Evidence Centre, ‘The art in the
artificial’ (June 2020): https://pec.ac.uk/research-reports/the-art-in-the-artificial [accessed
1 December 2022].
32 Immerse UK, 2022 Immersive Economy Report (October 2022): https://www.immerseuk.org/wp-
content/uploads/2022/10/Immersive-Economy-2022-final-13-Oct.pdf [accessed 1 December 2022]
33 PwC, ‘Virtual and augmented reality could deliver a £1.4 trillion boost to the global economy by
2030’ (2020): https://www.pwc.com/id/en/media-centre/press-release/2020/english/virtual-and-
augmented-reality-could-deliver-a-p1-4trillion-boost.html [accessed 1 December 2022]
34 The European Museums Network, ‘The most visited museums in the world’: http://museums.eu/
highlight/details/105664/the-most-visited-museums-in-the-world [accessed 1 December 2022]
35 QQ 113–117
36 Q 113
37 Communications and Digital Committee, Licence to change: BBC future funding (1st Report, Session
2022–23, HL Paper 44)
38 QQ 8, 110
39 QQ 8, 37, 116
40 Communications and Digital Committee, Licence to change: BBC future funding (1st Report, Session
2022–23, HL Paper 44) and written evidence from the British Film Institute (CRF0051)
present major barriers to growth in multiple subsectors.41 In emerging fields

such as virtual reality, US technology giants are generating vast amounts of
commercial data from users, giving them significant advantages over UK
small and medium-sized enterprises (SMEs).42
12. International trade figures also suggest strong competition. UK creative
goods exports fell by 47 per cent between 2019 and 2020. While this was
largely attributable to the pandemic, some other countries achieved growth
in 2020 and by 2021 many more had exceeded pre-pandemic levels.43 In
2020 the UK’s 5.3 per cent share of global creative services exports placed it
in the top five biggest exporters—but only just ahead of Japan (4.4 per cent)
and the Netherlands (4.3 per cent), and significantly behind Germany’s 7
per cent share.44 Several witnesses warned that the UK must work hard to
maintain its position or risk falling behind in a competitive international
marketplace.45
13. In research, current trends suggest the UK may cede its leading position in
important areas. Many other countries have a higher growth rate in artificial
intelligence (AI) research, for example.46 Melissa Terras, Professor of Digital
Cultural Heritage at the University of Edinburgh, warned that UK staff
were being left out of leading international cultural research collaborations
because of Brexit-related barriers to participation.47
14. We asked witnesses whether there was a risk that the UK was being complacent
about the prospects of continued future success in the creative industries.
Paul Owens, co-founder of the global advisory firm BOP Consulting, was
unequivocal: “There is not a danger of it—we are”.48 Many witnesses agreed.49
The need for change

15. The opportunities and challenges outlined above offer compelling reasons
for the Government to treat the creative industries as a strategic priority.
We were therefore concerned to learn that the sector was characterised by
a high degree of policy incoherence. As we explore throughout this report,
urgent changes are needed to improve intellectual property law and artists’
rights; research and development; fiscal incentives; business support; data
collection; education provision; career pathways and skills development
schemes.
16. Moreover, senior figures in Government need to show more clearly that
they recognise the creative industries’ potential. The sector is an economic
powerhouse, and highly innovative. The Prime Minister recently said
41 Q 34
42 Q 33 (Verity McIntosh)
43 United Nations Conference on Trade and Development, Creative Economy Outlook 2022 (2022), p 33:
https://unctad.org/system/files/official-document/ditctsce2022d1_en.pdf [accessed 1 December
2022]
44 Ibid., p 51
45 Q 113
46 Creative Industries Policy and Evidence Centre, ‘The art in the artificial’ (June 2020): https://pec.
ac.uk/research-reports/the-art-in-the-artificial [accessed 1 December 2022]. See also IBM, Global
AI adoption index 2021 (2021), p 10: https://filecache.mediaroom.com/mr5mr_ibmnews/190846/
IBM%27s%20Global%20AI%20Adoption%20Index%202021_Executive-Summary.pdf [accessed 10
December 2022]
47 Q 44
48 Q 110
49 Q 53 (Dr Nicola Searle), Q 57 (Adam Dickinson); Q 113 (Professor Hye-Kyung Lee) and Q 121
(Professor Christopher Smith)
innovation would be “a defining focus of my government”, describing it as

the “product of creativity and ingenuity”.50 Yet the creative sector scarcely
featured in the 2022 Autumn Statement and was not included in the
Government’s five priorities for growth.51
17. The UK’s engagement with international opportunities appears to be
declining too. Industry expert John Howkins told us the Government had
become “reluctant to exercise [its] leadership in international forums”, with
the UK absent at key gatherings such as the World Conference in the Creative
Economy.52 Creative exports are a global growth area, but Dr Martin Smith
told us that cuts to the British Council had impacted the work of its creative
industries team, hampering opportunities to build profitable overseas
networks.53
18. Our evidence session with ministers was also not auspicious. While we heard
welcome commitments to supporting the sector,54 we also noted concerning
examples of disconnect. We found a lack of engagement around UKRI’s
Creative Industries Clusters Programme—one of the most impressive
investment programmes in recent times.55 And we heard that major proposals
to reform intellectual property law had apparently been brought forwards
without the support of the Minister of State for Media, Data and Digital
Infrastructure, Julia Lopez MP.56
19. The disconnect between the sector’s potential and cross-Government
priorities was evident throughout our inquiry. As we explore in this
report, senior figures in the Department for Education, HM Treasury,
the Department for Business, Energy and Industrial Strategy (BEIS) and
DCMS will need to address the mismatch between the commercial potential
offered by the creative sector, and current ministerial priorities and rhetoric.
As Julia Lopez MP emphasised, DCMS is:
“still seen as the ministry of fun, but I want it to be understood as the
ministry of a major economic growth area, future technologies … it is
incredibly important that we do not try to diminish the public perception
of what are fundamentally important industries and ones where the UK
has a real competitive advantage.”57
20. In isolation, each of the issues set out in this chapter is manageable. But
taken together they present a serious challenge to future prosperity. An up-
to-date cross-government plan is needed to support the future of the creative
industries. We noted the sector has benefited from Government attention
50 Prime Minister’s Office, ‘PM speech to the CBI conference: 21 November 2022’ (November 2022):
https://www.gov.uk/government/speeches/pm-speech-to-the-cbi-conference-21-november-2022
51 The Statement cited “key growth industries—including digital technology, life sciences, green
industries, financial services, and advanced manufacturing”. See HM Treasury, ‘Autumn Statement
2022’: https://www.gov.uk/government/publications/autumn-statement-2022-documents/autumn-
statement-2022-html [accessed 1 December 2022]. The Government published a consultation on the
same day regarding the continuation of existing tax relief for the audio-visual sector. See HM Treasury,
‘Audio-visual tax reliefs: consultation’: https://www.gov.uk/government/consultations/ audio-visual-
tax-reliefs-consultation [accessed 1 December 2022]. See Chapter 3 for further discussion.
52 Written evidence from John Howkins (CRF0062)
53 Supplementary written evidence from Dr Martin Smith (CRF0061). See also Q 118.
54 Q 132 (Julia Lopez MP)
55 Q 134
56 Q 140 (Julia Lopez MP)
57 Q 137
over the past decade: audiovisual tax reliefs, the 2017 Industrial Strategy and
the 2018 Creative Industries Sector Deal, and the pandemic recovery funds
were all significant interventions which have been welcomed.58 But these are
now several years old, and Government interest appears to have declined.
The Government’s forthcoming Sector Vision is therefore very welcome.59
This must be used by ministers across Government to identify priorities and
take difficult choices about the allocation of scarce resources.60
21. In recent years the creative industries have delivered more economic
value than the life sciences, aerospace and automotive sectors
combined. The Government has a major opportunity to put the sector
at the heart of its future growth agenda. It is failing to do so. The
Government should commit to placing the creative industries at the
heart of its growth plans. It should explain its rationale for omitting
the creative industries from its Autumn Statement priority growth
sectors.
22. We welcome the Government’s plans for a Creative Industries Sector
Vision, which has been delayed since summer 2022. The Government
should publish the Sector Vision at the earliest opportunity.
The Government should take account of the conclusions and
recommendations in this report when implementing the Sector
Vision’s workstreams.
58 For detail on the Sector Deal see: BEIS and DCMS, ‘Creative industries: Sector Deal’ (March 2018):
https://www.gov.uk/government/publications/creative-industries-sector-deal [accessed 1 December
2022]. For detail on audiovisual tax reliefs and support funds see Chapter 4.
59 In February 2022 the Government said it would introduce a Sector Vision in partnership with
the Creative Industries Council in the summer of 2022. See DCMS, ‘£50 million of Government
investment announced for creative businesses across the UK’ (February 2022): https://www.gov.uk/
government/news/50-million-of-government-investment-announced-for-creative-businesses-across-
the-uk [accessed 4 December 2022]
60 Q 121
Chapter 2: A DIGITAL FUTURE
Overview
23. We took evidence from industry and academic experts on the likely impacts
of technology on the creative industries over the next 5–10 years. We heard
that new technologies and the rise of digitised culture will change the way
creative content is developed, distributed and monetised.
24. Many of these changes offer opportunities for innovation and growth. New
tools for developing creative content are proliferating rapidly, from 3D design
modelling to AI-generated art and music. Content distribution is becoming
increasingly digital: music, video and game streaming are prominent
examples, but other subsectors are following suit. Museums and galleries
are digitising their collections, while performing venues offer immersive
shows and online screenings. The pandemic accelerated shifts towards
digital platforms, creator economies and e-commerce across the industry.
Such changes provide expanding possibilities for monetising the associated
data and improving business strategies. The much-hyped metaverse concept
may yield further possibilities for developing, sharing and selling creative
content.61
25. There is a variety of Government interventions and industry schemes to
help organisations navigate this fast-changing world. Initiatives range from
Government-backed innovation funds62 and research council programmes
for digitising heritage collections,63 through to industry-led investment and
business support programmes.64 Our evidence suggested there were four
key areas that required greater Government attention: reviewing reforms to
intellectual property law; strengthening rights for performers and artists;
maintaining high standards in trade deals; and putting plans in place to
support the workforce to adapt as technological changes disrupt the creative
sector.
Text and data mining

26. The Creative Rights Alliance told us that a robust intellectual property (IP)
and copyright regime is crucial to supporting creative sector workers and
growth: “without creators’ rights to copyright protection over the works
they create there is little incentive to invest in their own future careers.”65 IP
rights provide crucial revenue streams for those in the creative sector, from
61 Written evidence from the British Film Institute (CRF0051); University of Arts London (CRF0044);
Royal College of Art (CRF0041); National Museum Directors’ Council (CRF0040); Minderoo
Centre for Technology and Democracy, University of Cambridge (CRF0026); Equity (CRF0010) and
Professor Tracey Harwood (CRF0001)
62 Written evidence from DCMS (CRF0058); correspondence from Professor Dame Ottoline Leyser
DBE FRS, Chief Executive of UK Research and Innovation (2 December 2022): https://committees.
parliament.uk/publications/31963/documents/179566/default/
63 UKRI, ‘Artificial intelligence supports culture and heritage exploration’ (September 2021): https://
www.ukri.org/news/artificial-intelligence-supports-culture-and-heritage-exploration/ [accessed 3
December 2022]
64 Q 141 (Kevin Hollinrake MP). See also written evidence from the Greater London Authority
(CRF0020); British Film Institute (CRF0051). We explore issues regarding fragmentation in greater
detail in Chapter 3.
65 Written evidence from the Creative Rights Alliance (CRF0014)
freelancers to major businesses.66 IP rules protect around £63 billion worth

of investments in knowledge assets each year.67
27. The Government’s proposed changes to IP law provided an illustrative
example of the tension between developing new technologies and supporting
rights holders in the creative industries. In 2021 the Intellectual Property
Office (IPO) consulted on the relationship between IP and AI.68 In 2022 the
IPO set out its conclusions, which included “a new copyright and database
right exception which allows text and data mining for any purpose.”69
28. Dr Andres Guadamuz, Reader in Intellectual Property Law at the University
of Sussex and chief editor of the Journal of World Intellectual Property,
explained that text and data mining involved copying and analysing large
datasets to identify patterns and trends. This is typically done to train AI
algorithms, conduct academic research or support commercial purposes.
Mining these data often requires a copyright licence or relying on a copyright
exception. The UK offers exceptions for non-commercial research, among
others.70
29. In 2019, the European Union amended its text and data mining rules by
introducing a change to support commercial mining. The new regime
included an “opt-out”. Dr Guadamuz explained this enabled artists to say
“I don’t want my art to be in this dataset”. He said the UK then sought to
“go beyond that” in its consultation by proposing a regime that could be
used “for all commercial purposes without an opt-out.”71 The effect of the
proposed regime would be that businesses could scrape text and content
created by others and use this for commercial gain without payment to the
original creator—presumably they could even seek their own copyright
protection for the resulting creation.
30. The IPO’s proposal generated significant concern within the creative
industries about potential loss of revenue. Dan Conway, Chief Executive
of the Publishers Association, described the Government’s proposals as “a
sledgehammer to crack a nut”. He said there were better options in the IPO’s
consultation, such as introducing more limited changes72 to improve the
66 Freelance UK, ‘Intellectual Property: What freelancers need to know’: https://www.freelanceuk.com/

legal/intellectual-property-what-freelancers-need-know-part-1.shtml [accessed 12 December 2022]
67 Intellectual Property Office, ‘Artificial Intelligence and Intellectual Property: copyright and patents:
Government response to consultation’ (June 2022): https://www.gov.uk/government/consultations/
artificial-intelligence-and-ip-copyright-and-patents/outcome/artificial-intelligence-and-intellectual-
property-copyright-and-patents-government-response-to-consultation [accessed 3 December 2022]
68 Intellectual Property Office, ‘Consultation outcome: Artificial Intelligence and Intellectual
Property: copyright and patents’ (June 2022): https://www.gov.uk/government/consultations/
artificial-intelligence-and-ip-copyright-and-patents/artificial-intelligence-and-intellectual-property-
copyright-and-patents [accessed 3 December 2022]
69 Ibid., para 58
70 Intellectual Property Office, ‘Consultation outcome: Artificial Intelligence and Intellectual
Property: copyright and patents’ (June 2022): https://www.gov.uk/government/consultations/
artificial-intelligence-and-ip-copyright-and-patents/artificial-intelligence-and-intellectual-property-
copyright-and-patents [accessed 3 December 2022]. See also Q 15.
71 Q 15
72 The IPO consultation response set out four options, ranging from no change through to different
types of TDM exception. See Intellectual Property Office, ‘Artificial Intelligence and Intellectual
Property: copyright and patents: Government response to consultation’ (June 2022): https://www.gov.
uk/government/consultations/artificial-intelligence-and-ip-copyright-and-patents/outcome/artificial-
intelligence-and-intellectual-property-copyright-and-patents-government-response-to-consultation
licensing environment. He argued text and data mining licensing was worth
£335 million a year to publishers, and said the IPO’s proposals:
“would allow any … businesses of any size, located anywhere in the
world, to access all my members’ data for free for the purposes of text
and data mining. There is no differentiation between a large US tech
firm in the US and an AI micro start-up in the north of England.”73
31. UK Music similarly told us that the music sector:
“remains deeply concerned about proposals by the Intellectual Property
Office to allow a blanket exemption from copyright for work being used
for AI text and data mining … Removing this protection as the IPO
proposes would allow AI music to be created using copyright content
that those controlling the AI do not own, with no compensation to the
artists and rights holders whose investment created it … This change is
at best unnecessary and at worst actively harmful.”74
32. Dr Nicola Searle said the issue was complex and the key question for
Government on this issue was to identify the correct balance in legislation:
“Do you put the balance on enabling the new technology, or do you put
the balance on supporting existing copyrights holders? It is a difficult
question.”75
33. We asked the minister, Julia Lopez MP, why the IPO was proposing a new
regime that appeared to undercut business models in the creative industries.
She emphasised that IP was the “lifeblood” of creative businesses and said
she was “not convinced of the value of this piece of work”. The minister told
us she was “fairly confident” that the IPO’s proposals were “not going to be
proceeding”.76
34. The Intellectual Property Office’s proposed changes to intellectual
property law are misguided. They take insufficient account of
the potential harm to the creative industries. They were not even
defended by the minister in the Department for Digital, Culture,
Media and Sport whose portfolio stands to be most affected by the
change. Developing AI is important, but it should not be pursued at
all costs.
35. The Intellectual Property Office should pause its proposed changes to
the text and data mining regime immediately. It should conduct and
publish an impact assessment on the implications for the creative
industries. If this assessment finds negative effects on businesses
in the creative industries, it should pursue alternative approaches,
such as those employed by the European Union. The Intellectual
Property Office should write to us confirming its plans and timelines
in response to this report.
Securing performers’ rights

36. We heard that advances in AI also raised challenges around the digital
reproduction of performers and their works. Many tools are available to
73 Q 15
74 Written evidence from UK Music (CRF0037)
75 Q 49
76 Q 140
create or modify a digital likeness of a performer’s image or voice. These

might be used for film stunts, music performances or marketing campaigns,
for example.77 Such techniques are likely to become more sophisticated,
affordable and widespread over the next 5–10 years.78
37. Equity, a trade union for performers and creative practitioners, highlighted
two problems with this trend. First, performers may be compensated
inadequately, if at all. In some cases, complex and opaque contracts are
used to assign an artist’s image and likeness rights for use by third party
commercial clients.79 Some artists say they are being exploited:
“In the last six months, my voice has been used in huge marketing
campaigns by global companies selling cars and home products in huge
marketing campaigns, including national TV commercials and digital
campaigns. I don’t receive a penny”.80
38. Second, we heard that the Copyright, Designs and Patents Act 1988 may
not provide artists with certainty about their rights over AI-generated
reproductions. The Act provides protections for generating a ‘recording’ or
a ‘copy’ of a performance. On 10 October 2022 the Government stated in
answer to a parliamentary question:
“Sections 182 and 182A of the Act give performers the right to control
who is able to record and make reproductions of their performances.
These provisions apply regardless of the technology used to make such
reproductions, including AI technology.”81
39. Equity, however, has said greater clarity is needed because the law is drafted
in such a way that new AI tools for synthesising content effectively create
“digital sound and look-alikes [ … which could fall] outside the scope of
protection”.82
40. We heard that the Government could help artists and performers by
ratifying the Beijing treaty on audiovisual performances. This international
agreement provides intellectual property rights for audiovisual performances
used in films, television programmes and other recordings. The UK signed
the treaty in 2013 but has not ratified it since the UK’s departure from the
European Union.83 Some areas of the treaty are already covered by UK law.
77 Written evidence from Equity (CRF0010)

78 See Thomas Davenport and Nitin Mittal, ‘How generative AI is changing creative work’ (November
2022): https://hbr.org/2022/11/how-generative-ai-is-changing-creative-work [accessed 8 December
2022].
80 Cited in Equity, Stop AI Stealing The Show (April 2022), p 7: https://www.equity.org.uk/media/6134 /
report-stop-ai-stealing-the-show.pdf [accessed 21 November 2022]
81 Written answer, HL2336, Session 2022–23
83 The Government states that it supports the Beijing Treaty “but was not able to implement or ratify
it independently while a member of the EU. Now that we have left the EU, the government is
resolved to do so.” For further detail see Intellectual Property Office, ‘Beijing Treaty on Audiovisual
Performances’ (April 2021): https://www.gov.uk/government/consultations/beijing-treaty-on-
audiovisual-performances-call-for-views/beijing-treaty-on-audiovisual-performances-call-for-views
[accessed 21 November2022]
Other areas, notably moral rights in audiovisual fixations, are not.84 A 2021
consultation on the treaty said the UK Government “intends to implement
and ratify the Beijing Treaty”, but it has not yet done so.85
41. Paul Fleming, General Secretary of Equity, said that ratifying the Beijing
treaty was a “very straightforward” way to help manage the impact of new
technologies and reduce exploitation risks. He cautioned that the current
absence of a “fit-for-purpose moral framework for audio-visual performances”
raised the risks of production moving to better-regulated jurisdictions, such
as the EU and the United States.86
42. New technologies are making it easier and cheaper to reproduce and
distribute creative works and image likenesses. Timely Government
action is needed to prevent such disruption resulting in avoidable
harm, or production moving to countries with better regulation.
The Government should ratify the Beijing treaty on audio-visual
performances at the earliest opportunity. It should set out its
timelines for doing so in response to this report.
Intellectual property and international trade

43. DACS, an industry body, told us the UK’s copyright framework was in many
respects recognised as an international “gold standard”.87 We heard concerns
from stakeholders that this framework was being put at risk as a result of
trade deal negotiations.
44. The Publishers Association urged the Government to “show global leadership
by enshrining strong IP and copyright standards in future trade deals, and
reject any changes to copyright that threaten UK innovation and creativity.”88
Giorgio Fazio, Professor of Macroeconomics at the University of Newcastle,
similarly told us it was important for UK trade negotiations to take account
of the particular IP needs of the creative industries:
“the IP that matters for the creative industries may be substantially
different from the IP for other industries, because the creative industries
rely a bit less on patents and a lot more on copyright, trademarks and
design.”89
45. The Alliance for Intellectual Property (AIP) has however highlighted
problems with the Government’s approach to trade deals. The UK’s
proposed accession to the Comprehensive and Progressive Agreement for
Trans-Pacific Partnership (CPTPP) is illustrative. Issues identified by AIP
include:
84 Moral rights enable the performer to claim to be identified as the performer, except where omission
is dictated by the manner of the use; and object to any distortion, mutilation or other modification of
their performance that would be prejudicial to their honour or reputation, taking due account of the
nature of audiovisual productions. Audiovisual fixations are defined as “the embodiment of moving
images, whether or not accompanied by sounds or by the representations thereof, from which they
can be perceived, reproduced or communicated through a device.” For further detail see Intellectual
Property Office, ‘Beijing Treaty on Audiovisual Performances’ (April 2021): https://www.gov.uk/
government/consultations/beijing-treaty-on-audiovisual-performances-call-for-views/beijing-treaty-
on-audiovisual-performances-call-for-views [accessed 21 November2022]
85 Ibid.
86 Q 17
87 Written evidence from DACS (CRF0042)
88 Written evidence from the Publishers Association (CRF0045)
89 Q 52
• inadequate requirements for signatory nations to prevent piracy and IP

theft;
• proposed reductions to the time span for UK rights holders to benefit

from content, resulting in reduced revenue; and
• insufficient provision of artist resale rights, which would provide

royalties for UK artists on works sold in secondary markets.90
46. DACS similarly raised concerns that the UK’s accession to the CPTPP
involved signing up to agreements that provide “zero recognition for creators”
and “undermine the UK’s robust legal framework in intellectual property;
particularly copyright”.91 We noted related concerns around suggestions that
the UK’s framework for exhaustion rights could be weakened in future if
proposals to move to an ‘international exhaustion regime’ were to go ahead.92
47. The UK’s intellectual property framework is respected across the
world. These protections underpin the success of the UK’s creative
industry exports. The Government must not water them down when
striking new trade deals. The Department for International Trade
should commit to maintaining the UK’s existing standards of
intellectual property rights in all future trade deals.
AI and jobs
48. We heard that while AI would create new work opportunities in some places,
it would likely reduce them in others. This has particular implications for
those on lower incomes or insecure contracts. Mr Fleming told us that around
“80 to 90 per cent of [Equity’s] members are earning less than £20,000 a
year from the industry itself” and raised concerns that the areas of work
that sustain them through periods of low pay were “about to be removed
… because of the speed of AI intervention.”93 Some film extras can now be
computer generated, for example.94 In January 2023, Apple announced a
catalogue of audiobooks narrated by AI rather than human actors.95 Regular
annual contracts are being replaced with one-off payments because the
artist’s “image, voice or likeness [can now] be used forever and on thousands
of projects”, according to Equity.96
49. AI is also moving into territories traditionally considered difficult to automate,
such as music and visual art production. We were told about the challenges
involved in distinguishing hype from reality in this field.97 Aidan Meller, a
90 Written evidence submitted to the International Agreements Committee inquiry on Intellectual

Property Rights and the Comprehensive and Progressive Agreement for Trans Pacific Partnership
from the Alliance for Intellectual Property (UKT0024)
91 Supplementary written evidence from DACS (CRF0068)
92 Q 15 (Dan Conway). For details on exhaustion rights see Intellectual Property Office, ‘UK’s future
exhaustion of intellectual property rights regime: Summary of responses to the consultation’ (18
January 2022): https://www.gov.uk/government/consultations/uks-future-exhaustion-of-intellectual-
property-rights-regime/uks-future-exhaustion-of-intellectual-property-rights-regime-summary-of-
responses-to-the-consultation [accessed 21 December 2021]
93 Q 16
94 Q 14
95 ‘Death of the narrator? Apple unveils suite of AI-voiced audiobooks’, The Guardian (4 January 2023):
https://www.theguardian.com/technology/2023/jan/04/apple-artificial-intelligence-ai-audiobooks
97 Q 14
gallery director and modern art specialist, anticipated significant impacts to

the creative industries in the near future in an “AlphaGo moment”.98
50. We heard similar views from his robot Ai-Da, which provided autonomous
answers in our evidence session using AI language algorithms.99 It explained
how it used cameras in its eyes and a robotic arm to create canvas paintings,
and said that “technology can be both a threat and an opportunity” to the
arts. It suggested there were “not many limits to how [technology] can be used
in a contemporary art setting”.100 We heard other AI-powered tools, such as
DALL-E and Stable Diffusion, also provided increasingly sophisticated (and
accessible) ways to generate high-quality artwork—though many stakeholders
remained sceptical about their future value and impact.101 Other tools, such
as the recent ChatGPT text generation platform, have shown the speed at
which AI innovations can develop.102
51. We heard many arguments that the creative industries were less exposed
to AI automation and disruption than other sectors because of the reliance
on human creativity.103 Others were less certain.104 Dr Guadamuz cautioned
that several previous predictions of limited AI capability had been rapidly
overtaken by technological advances. He emphasised the limits of current
capabilities and difficulties in making forecasts, but suggested the future
might involve “almost unlimited content that will compete with human
content. It will not be very good, but it will be free.”105
52. The creative industries are not alone in facing potential disruption from
AI, and many analyses suggest any job losses would be compensated by the
creation of new roles elsewhere.106 But the question of who might lose out is
nevertheless important, particularly given the sector’s historical challenges
around diversity and inclusive working practices, and sizeable technology-
related skills gaps.107
53. Research on the COVID-19 pandemic showed that financial difficulties and
uncertainty resulted in large numbers of people exiting the workforce, in
particular those from diverse backgrounds.108 Concerns about technology-
98 Q 24
99 The questions were submitted to the robot in advance to allow time for its algorithms to develop a
comprehensive response. The robot appeared as a proxy witness for Mr Meller and did not hold the
same status as a human witness.
100 Q 28
101 Q 14
102 See OpenAI, ‘Optimizing language models for dialogue’: https://openai.com/blog/chatgpt/ [accessed
21 December 2022]
103 Written evidence from the University of Arts London (CRF0044) and HM Government—Department
for Digital, Culture, Media and Sport (CRF0058)
104 Written evidence from Equity (CRF0010) and Society of Authors (CRF0031)
105 Q 16
106 World Economic Forum, ‘The future of jobs report 2020’ (October 2020): https://www.weforum.org/
reports/the-future-of-jobs-report-2020/digest [accessed 3 December 2022]
107 See Creative Industries Policy and Evidence Centre, ‘The Good Work Review’ (March 2022): https://
pec.ac.uk/news/good-work [accessed 3 December 2022].
108 Centre for Cultural Value, ‘The impact of Covid-19 on jobs in the cultural sector’ (2020): https://
www.culturehive.co.uk/CVIresources/the-impact-of-covid-19-on-jobs-in-the-creative-and-cultural-
sectors/ [accessed 3 December 2022] and Centre on the Dynamics of Ethnicity, and Creative Access,
The impact of Covid-19 and BLM on Black, Asian and ethnically diverse creatives and cultural workers
(March 2022): https://pure.manchester.ac.uk/ws/portalfiles/portal/212029276/Impact_of_covid_
and_blm_on_ethnically_diverse_creatives_and_cultural_workers_report.pdf [accessed 3 December
2022]
driven job insecurity are growing and can be expected to continue.109 These
trends risk widening the gap between those who can afford to work in
more precarious and uncertain positions, and those who cannot.110 Such
developments would in turn affect the diversity and business resilience that
underpin the economic vibrancy of creative sector organisations.111 As the
Creative Industries Policy and Evidence Centre concluded in a recent report:
“[if] the UK does not take action, there is a risk its position in the sector
could be undermined”.112
54. Like other sectors, the creative industries are exposed to the
opportunities and threats of automation and job replacement.
Workers on lower incomes and insecure contracts are particularly
vulnerable. The Government’s Sector Vision must set out a clear
plan for ensuring that its encouragement of technological change is
accompanied by complementary plans to help the creative industries
sustain quality jobs and promote a diverse workforce.

110 For further detail on diversity and inclusion in the creative industries, see the All Party Parliamentary
Group for Creative Diversity, Creative Majority (2021): https://www.kcl.ac.uk/cultural/resources/
reports/creative-majority-report-v2.pdf [accessed 24 November 2022]. For further detail on working
conditions see Doris Ruth Eikhof, ‘COVID-19, inclusion and workforce diversity in the cultural
economy: what now, what next?’; Cultural Trends, vol. 29, (2020), pp 236–237: https://www.tandfonline.
com/doi/pdf/10.1080/09548963.2020.1802202 [accessed 3 December 2022]
111 See written evidence from the Institute for Creative and Cultural Entrepreneurship para 12 (CRF0016);
Creative Informatics and the Edinburgh Futures Institute, University of Edinburgh, (CRF0035); and
the Society of Authors (CRF0031).
112 Creative Industries Policy and Evidence Centre, ‘The art in the artificial’ (June 2020): https://pec.
ac.uk/research-reports/the-art-in-the-artificial [accessed 8 December 2022]
Chapter 3: IMPROVING THE BUSINESS ENVIRONMENT
55. Many of the challenges facing creative businesses are not unique to the
sector: skills shortages, uneven support for innovation, growing international
competition, barriers to scaling and insufficient access to finance apply to
other areas of the economy.
56. We heard however that the distinctive characteristics of the creative sector
require tailored solutions. The sector is dominated by small and medium-
sized enterprises (SMEs) distributed across regional clusters, with a
particularly high proportion of microbusinesses.113 A third of the workforce
is freelance, compared with 16 per cent of the wider economy.114 The
proportion of creative businesses investing in research and development
(R&D) is “massive compared to many other business sectors,” according to
the Chief Executive of Creative UK, Caroline Norbury.115
57. We received numerous suggestions for improving the business environment
for the creative sector. There is a range of existing schemes.116 Our inquiry
focused on four areas for further work: expanded cluster-based innovation
funding; reforms to R&D tax policy; practical support for SMEs in the
creative sector; and targeted measures for innovation in the arts.
Creative Industries Clusters Programme

58. The creative industries have been growing at nearly twice the rate of the wider
economy in recent years.117 Analysis published by Nesta found that “dense,
diverse and highly networked” creative clusters have been key to the sector’s
success.118 Clusters typically involve groups of businesses in an industry
benefiting from close geographical proximity to one another—for example
from access to shared skills, resources and customers.119 A 2016 Nesta report
identified 47 main creative clusters across the UK.120 Subsequent research
identified 709 creative ‘micro-clusters’,121 of which a third lie outside the 47
major clusters.122
113 Businesses which employ fewer than 10 staff.

114 Creative Industries Policy and Evidence Centre, ‘National Statistics on the Creative Industries’:
https://pec.ac.uk/news/national-statistics-on-the-creative-industries [accessed 1 December 2022]
115 Q 8 (Caroline Norbury)
116 Major schemes include the Culture Investment Fund, the Culture Recovery Fund, the Create Growth
Programme, the Creative Industries Clusters Programme and Audience of the Future Programme.
For further details on SME business support see Q 141 (Kevin Hollinrake MP); and written evidence
from HM Government—Department for Digital, Culture, Media and Sport (CRF0058).
117 Department for Digital, Culture, Media and Sport, ‘£50 million of Government investment announced
for creative businesses across the UK’ (1 February 2022): https://www.gov.uk/government/news/50-
million-of-government-investment-announced-for-creative-businesses-across-the-uk [accessed
1 December 2022]
118 Juan Mateos-Garcia and Hasan Bakhshi, The Geography of Creativity in the UK (July 2016): https://
media.nesta.org.uk/documents/the_geography_of_creativity_in_the_uk.pdf [accessed 1 December
2022]
119 Dr Josh Siepel, ‘Small engines of growth: Understanding creative microclusters’ (19 November 2020):
https://pec.ac.uk/blog/small-engines-of-growth-understanding-creative-microclusters [accessed
1 December 2022]
120 Juan Mateos-Garcia and Hasan Bakhshi, The Geography of Creativity in the UK (July 2016): https://
media.nesta.org.uk/documents/the_geography_of_creativity_in_the_uk.pdf [accessed 1 December
2022]
121 Micro-clusters involve at least fifty creative industries organisations in an area.
122 Dr Josh Siepel, ‘Small engines of growth: Understanding creative microclusters’ (19 November 2020):
https://pec.ac.uk/blog/small-engines-of-growth-understanding-creative-microclusters [accessed
1 December 2022]
59. Much of our evidence suggested that creative clusters should be prioritised
in future growth and innovation plans.123 Councillor Phil Seeva from the
Local Government Association argued this should be an integral part of the
Government’s ‘Levelling Up’ agenda.124 Yet we learnt that funding decisions
by UK Research and Innovation (UKRI)125 would not prioritise its flagship
Creative Industries Clusters Programme, dedicated to boosting cluster-
based innovation and growth.126
Box 1: UKRI’s Creative Industries Clusters Programme
The Creative Industries Clusters Programme was launched in 2018 with

funding from the Industrial Strategy Challenge Fund. It involved a £55 million
initial investment awarded by the Arts and Humanities Research Council
(AHRC) to nine creative clusters around the UK following a year-long selection
process. The aim was to provide a catalyst to drive innovation, boost skills, and
create products and experiences that could be marketed. Nine clusters were set
up across the UK focusing on different subsectors of the creative industries.
Funding for the programme ends in March 2023.
Source: UKRI, Creative industries clusters: https://www.ukri.org/what-we-offer/our-main-funds/industrial-
strategy-challenge-fund/artificial-intelligence-and-data-economy/creative-industries-clusters/ [accessed 2 December
2022]
60. UKRI told us that the results of its £55 million investment in the programme
were “far exceeding what was thought possible”.127 Initial evaluation data
show the programme had:
• delivered almost £4 in co-investment for every £1 of UKRI funding;
• created or safeguarded over 4,000 jobs;
• supported 227 new spinouts and start-ups;
• funded 700 industry-led R&D projects/businesses;
• supported 558 new products, services and experiences; and
• trained 3,500 industry professionals and academics.128

61. Professor Christopher Smith, Chief Executive of the Arts and Humanities
Research Council (AHRC), said the returns were “600 per cent higher than
what we expected when we started”.129
62. During our inquiry we visited StoryFutures, one of the clusters based at
Royal Holloway University. The initiative focuses on “placing innovative
123 Written evidence from Dr Martin Smith (CRF0003); Dr Lucy McFadzean, Professor Gabriella
Giannachi, Joanne Evans (CRF0011); Advertising Association (CRF0013); Greater London Authority
(CRF0020); XR stories and screen industries growth network (CRF0023) and Creative Industries
Policy and Evidence Centre (CRF0024)
124 Q 104
125 UK Research and Innovation is a non-departmental public body that directs research and innovation
funding, funded through the science budget of the Department for Business, Energy and Industrial
Strategy.
126 Q 124 (Professor Christopher Smith)
127 Correspondence from Professor Dame Ottoline Leyser DBE FRS, Chief Executive of UK Research
and Innovation (2 December 2022): https://committees.parliament.uk/publications/31963/
documents/179566/default/
128 Ibid.
129 Q 123
storytelling at the heart of next generation immersive technologies”, reflecting

the growing overlap between creativity and technology.130 We heard that
the cluster programme’s value lay in convening universities, businesses and
local authorities to collaborate on R&D, skills training, business guidance
and support in bringing ideas to market.131 We noted many creative hubs
were thriving without being part of the UKRI programme but heard that its
infrastructure made a major difference in catalysing commercially orientated
collaboration between academics and SMEs. As Paul Owens, Chief Executive
Officer of BOP Consulting, explained:
“There have to be incentives for professors like [Professor James
Bennet, Director of StoryFutures] not just to be writing research papers
or working with IBM but to be working with interesting little games
companies and groups.”132
63. We asked witnesses why UKRI was not renewing funding for this programme.
Sir Peter Bazalgette, co-Chair of the Creative Industries Council, said UKRI
was opting for new initiatives such as Innovate UK’s £30 million Creative
Catalyst programme. He believed this was welcome but “not strategically as
clever as the creative clusters” in its targeting of subsectors or geographical
focus.133 He thought it was “perfectly possible” for other funding councils to
provide the money for the clusters programme.134
64. We wrote to Professor Dame Ottoline Leyser, Chief Executive of
UKRI, requesting further clarification. She told us that the Government
“did not renew the Industrial Strategy Challenge Fund (ISCF) that funds the
Creative Industries Clusters in their current form” at the latest Comprehensive
Spending Review and that funding would therefore end in March 2023. She
acknowledged the nine cluster programme leads had requested continued
funding from UKRI, but stated that in “difficult financial circumstances”
her organisation was focused on building a “portfolio of investments to
support the creative industries”, including:
• a £63.6 million investment in Convergent Screen Technologies And

performance in Realtime (CoSTAR);
• a £30 million Creative Catalyst programme;
• a £15 million circular fashion programme;
• a £22 million investment in Cardiff media organisations; and
• continued funding of the Creative Industries Policy and Evidence

Centre.135
65. UKRI said it was “considering” how these investments might support the
creative clusters. It was allowing cluster leads to bid for a portion of a £2
million AHRC investment to upgrade or renew equipment and facilities; and
130 StoryFutures, ‘StoryFutures and StoryFutures Academy’: https://www.storyfutures.com/about

[accessed 3 January 2023]
131 Written evidence from Professor Andrew Chitty (CRF0064)
132 Q 110
133 Q 123
134 Ibid.
135 Correspondence from Professor Dame Ottoline Leyser DBE FRS, Chief Executive of UK Research
and Innovation (2 December 2022): https://committees.parliament.uk/publications/31963/
documents/179566/default/
allocating funding from AHRC’s infrastructure programme “to enable staff

and talent retention from the Clusters Programme into the next financial
year.”136
66. We fail to understand UK Research and Investment’s rationale for
not allocating funding to continue the Creative Industries Clusters
Programme, and choosing to prioritise other projects—particularly
before the final impact evaluation has been completed. Current
assessments show the programme has far exceeded expectations in
promoting innovation, attracting co-investment and delivering SME
growth.
67. UKRI should review its funding allocations and identify options
for continuing the most successful clusters within the Creative
Industries Clusters Programme after March 2023. UKRI should
publish its plans and decision timelines in response to this report.
68. The Arts and Humanities Research Council and participating
universities should work with regions which are not part of the
Creative Industries Clusters Programme to share best practice and
create links between clusters.
Tax relief and innovation

69. We heard that innovation in the creative industries could be further enhanced
by changing tax policy to take better account of R&D in the creative industries.
Nesta’s 2018 analysis of the BEIS UK Innovation Survey found that the share
of creative businesses undertaking R&D was higher than in other services
sectors, and comparable with R&D-intensive industries like manufacturing.137
Analysis shows that this is the case even if the IT, Software and Computer
services sub-sector is removed from the calculation.138 A 2020 report for
DCMS found that 55 per cent of creative businesses had undertaken some
form of R&D in the previous three years according to definitions used by
the Organisation for Economic Co-operation and Development (OECD),
yet only 14 per cent would be eligible for UK tax relief.139
70. We heard that this discrepancy related to differing approaches to R&D tax
relief. The UK explicitly excludes arts, humanities and social sciences R&D
from the definition of R&D eligible for tax relief. The OECD definition of
R&D, upon which many member states base their tax relief policies, includes
arts, humanities and social sciences R&D. At least 23 other countries,
including Germany, France, Italy, South Korea and Mexico, recognise R&D
in the arts, humanities and social sciences for the purposes of tax credits.140
136 Ibid.
137 Nesta, What can we learn about the innovation performance of the creative industries from the UK Innovation
Survey (May 2018), p 2: https://media.nesta.org.uk/documents/Creative_industries_innovation_
analysis.pdf [accessed 17 November 2022]
138 Creative Industries Policy and Evidence Centre, The Art of R&D (2022), p 5: https://www.pec.ac.uk/
research-reports/the-art-of-r-and-d [accessed 21 December 2022]
139 DCMS, R&D in Creative Industries Survey—2020, Research report, Prepared for the Department for Digital,
Culture, Media and Sport By OMB Research (18 September 2020), p 1: https://assets.publishing.service.
gov.uk/government/uploads/system/uploads/attachment_data/file/919052/4565_-_DCMS_RD_in_
Creative_Industries_Survey_-_Report_-_D8_PDF.pdf [accessed 17 November 2022]
140 Dr Josh Siepel, Dr Jorge Velez-Ospina, ‘Key Facts About R&D in the Creative Industries’ (14 February
2022): https://pec.ac.uk/blog/key-facts-about-r-and-d [accessed 1 December 2022]
Box 2: Definitions of R&D eligible for tax relief
The OECD defines R&D as “Creative and systematic work undertaken in

order to increase the stock of knowledge—including knowledge of humankind,
culture and society—and to devise new applications of available knowledge”.
According to HMRC definitions, “R&D for tax purposes takes place when a
project seeks to achieve an advance in science or technology … It cannot be
an advance within a social science, like economics, or a theoretical field, such
as pure maths.” Government guidance states that arts and humanities are also
excluded.
Source: OECD, ‘Frascati Manual’ (2015): https://www.oecd.org/innovation/frascati-manual-2015–
9789264239012-en.htm; HM Treasury, ‘Claiming Research and Development Tax Reliefs’ (March 2020):
https://www.gov.uk/guidance/corporation-tax-research-and-development-rd-relief and HMRC, Research
and development tax relief: Making R&D easier for smaller companies: https://www.hmrc.gov.uk/gds/cird/
attachments/rdsimpleguide.pdf [accessed 2 December 2022]
71. Our evidence suggested the Government’s approach was limiting R&D
investment, especially as creative and technological innovation increasingly
overlap. Tom Box, Managing Director of Blue Zoo Animation, told us:
“The innovation tax reliefs are all centred around tech patents, and, in
the creative industries, it is not about patents because you cannot patent
a style or a creative concept, a visual concept.”141
72. Adam Dickinson, Development Director of the virtual reality SME Rezzil,
told us that the work of his technical programmers and artists was inextricably
linked, yet only the technical staff’s salaries could be claimed as R&D despite
them working side by side on the same product. As a result, the entire team’s
ability to innovate was limited by the number of artists the company could
afford to employ.142 The Crafts Council stated that expanding the definition
of R&D would enable “more than three times the number of current creative
businesses” to invest in digital innovation in processes and materials.”143
Government action
73. In 2021 the Treasury expanded R&D tax reliefs to include data and cloud
computing costs to support artificial intelligence businesses. Many creative
industries stakeholders called for a wider definition of qualifying expenditure
which would include more of the creative sector.144 The Government
declined, saying that other respondents had “raised concerns that a further
widening of the definition could result in deadweight claims, uncertainty
and complexity.”145
74. The 2022 Autumn Statement announced that while the Government’s
expenditure on R&D would increase, SMEs would receive less generous
benefits. The statement noted that the SME additional deduction would
decrease from 130 per cent to 86 per cent, and the SME credit rate would
141 Q 60
142 Ibid.
143 Written evidence from the Crafts Council (CRF0005)
144 HM Treasury, R&D Tax Reliefs (November 2021), p 15: https://assets.publishing.service.gov.uk/
government/uploads/system/uploads/attachment_data/file/1037348/RD_Tax_Reliefs.pdf [accessed
1 December 2022]
145 HM Treasury, R&D Tax Reliefs (November 2021) p 15: https://assets.publishing.service.gov.uk/
government/uploads/system/uploads/attachment_data/file/1037348/RD_Tax_Reliefs.pdf [accessed
1 December 2022]
decrease from 14.5 per cent to 10 per cent.146 The Treasury cited “significant
error and fraud” in the SME scheme among its reasons.147 The Government
committed to “work with industry to understand whether further support is
necessary for R&D intensive SMEs, without significant change to the overall
cost envelope for supporting R&D.”148
75. We asked ministers from DCMS and BEIS if they accepted that R&D policy
was negatively affecting creative sector businesses and should be reformed.
Kevin Hollinrake MP suggested that these issues would be addressed
in a consultation about separate, sector-specific audiovisual tax credits.149
However, Julia Lopez MP agreed the challenge was broader than this, noting:
“It goes beyond discrete tax credits for a particular industry; it is also
about that overlap. Creative industries move between sectors in a much
more fluid way than the tax credit system perhaps acknowledges.”150
76. The Government’s definition of R&D for tax relief is narrow and
restrictive compared with that in other OECD countries. This
risks holding back innovation in the UK’s creative industries. The
Government should change the definition of R&D for the purpose
of tax relief to include more of the creative sector. It should conduct
and publish a substantial review setting out the risks, costs, and
benefits of adopting such an approach. It should start by exploring
the OECD definition of R&D tax relief. The Government should
provide timelines for this review in response to this report.
Tax relief and international competition

77. There are eight additional sector-specific creative industry tax reliefs
covering film, animation, high-end TV, children’s TV, video games, theatre,
orchestras and museums and galleries.151 These have been widely praised
as highly valuable to these sectors and the wider economy.152 Animation
studio Blue Zoo said that its production “rocketed, with a 300 per cent
increase” after the introduction of animation tax reliefs.153 In film, a survey
of predominantly domestic production companies suggested that 38 per cent
of productions would not have taken place without the film tax relief.154 A
report for the BFI indicated the highest ever return on investment to the
146 HM Treasury, Autumn Statement 2022 (17 November 2022) p 54: https://assets.publishing.service.
gov.uk/government/uploads/system/uploads/attachment_data/file/1118417/CCS1022065440001_
SECURE_HMT_Autumn_Statement_November_2022_Web_accessible__1_.pdf [accessed
1 December 2022]
147 Ibid., p 35
148 Ibid., p 55
149 Q 140
150 Ibid.
151 HM Treasury, Audio-visual tax reliefs: consultation (November 2022): https://assets.publishing.service.
gov.uk /government/uploads/system/uploads/attachment_data/file/1118361/5082_consultation_
audio_visual_reliefs_reform.pdf [accessed 1 December 2022]
152 Q 34 (Dr Jo Twist); Q 60 (Tom Box); written evidence from Crafts Council (CRF0005); Equity
(CRF0010); Advertising Association (CRF0013); UK Interactive Entertainment (CRF0025);
Contemporary Visual Arts Network (CRF0034); Arts Council England (CRF0043); a-n The Artists
Information Company (CRF0050); British Film Institute (CRF0051) and Motion Picture Association
(CRF0057)
153 Escape Studios Animation Blog, ‘What are the challenges of running an animation studio? Blue Zoo’s
Tom Box explains’ (27 November 2015) https://escapestudiosanimation.blogspot.com/ 2015/11/what-
are-challenges-of-running.html [accessed 18 November 2022]
154 HM Treasury, Audio-visual tax reliefs: consultation (November 2022), p 7: https://assets.publishing.
ser v ice.gov.uk /gover n ment /uploads /system /uploads /at tach ment _ data /f ile /1118361/5082 _
consultation_audio_visual_reliefs_reform.pdf [accessed 1 December 2022]
UK economy of £13.48 billion gross value added from the Government’s

screen tax reliefs from 2017–2019.155 Video games tax relief helped support
£860 million in spending in 2019, up 23 per cent from 2017, according to the
British Film Institute. 156
78. We heard however that the UK faced growing international competition over
tax incentives to attract and retain these highly mobile businesses in the
UK. Video Games Tax Relief for example is worth up to 25 per cent of the
core production costs of a game.157 Dr Jo Twist, CEO of UK Interactive
Entertainment, said that countries such as Germany, Australia and Ireland
had examined UK policies and “created the same but with better rates.”158
The French tax credit for video games offers 30 per cent and parts of Canada
offer up to 40 per cent.159 Ireland, France, Quebec (Canada) and the Canary
Islands all currently offer Animation Tax Relief rates ranging between 37
and 50 per cent;160 in the UK the rate is 25 per cent.161 ScreenSkills noted
that in 2020, animation studio Brown Bag closed their Manchester studio,
which had employed 200 people, to concentrate on their Dublin and Toronto
bases.162
79. Much of our evidence suggested the Government should review tax reliefs
to ensure they provide a competitive business environment.163 In November
2022 the Government published a consultation on reform to creative industry
audio-visual tax reliefs covering film, animation, high-end TV, children’s
TV and video games. The Government said it was seeking to “go further
to support the growth of the audio-visual sector … ensuring these highly
skilled industries continue to thrive in the UK.”164
80. Tax reliefs have played an important role in supporting innovation,
growth and international competitiveness in the creative industries.
We welcome the Government’s commitment to continuing such
support. But other countries are increasingly adopting similarly
competitive tax relief systems. The UK is falling behind. The
Government’s consultation on creative industry tax reliefs must
benchmark UK incentives against those in other countries to ensure
the UK remains competitive.
Practical support for SMEs

81. Professor Feng Li, Chair of Information Management at Bayes Business
School, City, University of London, suggested that the UK’s creative
155 BFI, ‘New report show UK tax reliefs power unprecedented boom in UK screen industries’ (13
December 2021): https://www.bfi.org.uk/news/screen-business-report [accessed 21 December 2022]
156 Ibid.
157 Written evidence from UK Interactive Entertainment Association (CRF0025)
158 Q 37
159 Written evidence from UK Interactive Entertainment Association (CRF0025)
160 Supplementary written evidence from ScreenSkills (CRF0059)
161 HM Revenue & Customs, ‘Claiming Animation Tax Relief for Corporation Tax’ (10 February
2020): https://www.gov.uk/guidance/claiming-animation-tax-relief-for-corporation-tax [accessed 29
November 2022]
162 Supplementary written evidence from ScreenSkills (CRF0059)
163 Written evidence from UK Interactive Entertainment Association (CRF0025); Contemporary Visual
Arts Network (CRF0034); a-n The Artists Information Company (CRF0050); and ScreenSkills
(CRF0059)
164 HM Treasury, Autumn Statement 2022 (November 2022), p 55: https://assets.publishing.service.
gov.uk/government/uploads/system/uploads/attachment_data/file/1118417/CCS1022065440–001_
SECURE_HMT_Autumn_Statement_November_2022_Web_accessible__1_.pdf [accessed 21
November 2022]
businesses were “particularly adept at developing new ideas” but “many

are much less effective in exploiting and capturing the full commercial and
cultural values of their creations and rapidly scaling up”.165
82. We heard about a range of obstacles and potential solutions relating to SME
support in the UK.
Access to capital
83. Access to funding varies significantly across subsectors. Venture capital
investment in so-called CreaTech companies166 reached nearly £1 billion
in 2020, for example, a 22 per cent rise since 2019.167 Other areas receive
substantially less.168 Yet even high-growth areas face challenges: while
CreaTech companies tended to be over-represented in early-stage investment
types such as seed and angel investment, they raised between 22 and 34 per
cent less later-stage funding than other types of businesses.169
84. We heard numerous barriers to accessing funding. The intangible nature
of creative products was cited as increasing investors’ perception of risk.170
Several witnesses believed the culture of private investment in the UK was
more cautious than elsewhere, particularly compared with the US.171
85. Dr Martin Smith said the limited amount of publicly available data on
previously successful creative ventures made it harder for investors to
understand businesses and evaluate risk.172 He also drew attention to the
lack of specialist fund managers:
“if few fund managers are capable of doing this work profitably and
generating track records persuasive enough to enable them to raise new
investment funds … the availability of capital … is always likely to be
limited.”173
86. We heard that the consequences of limited financing included missed
opportunities for businesses to grow;174 founders having to rely on informal or
personal capital during lengthy investor discussions, which made selling up
more attractive;175 and a reliance on overseas investors which was associated
with talent and IP moving abroad.176
87. Other jurisdictions have taken a variety of approaches to de-risk investment.177
The European Union launched a Cultural and Creative Sectors Guarantee
165 Written evidence from Professor Feng Li (CRF0019)
166 Businesses at the intersection of the creative and technology sectors.
167 Tech Nation, The CreaTech Report 2021 (2021): https://technation.io/the-createch-report-2021/
168 Policy and Evidence Centre, ‘The Nature of Foreign Direct Investment in the Creative Industries’
(July 2022): https://pec.ac.uk/discussion-papers/the-nature-of-foreign-direct-investment-in-the-
creative-industries [accessed 3 December 2022]
169 Juan Mateos-Garcia, An analysis of Createch R&D business activity in the UK (September 2021): available
at https://pec.ac.uk/research-reports/createch-activity-in-the-uk [accessed 11 January 2023]
170 Q 54 (Professor Giorgio Fazio) )
171 Q 34 (Verity McIntosh); Q 37 (Catherine Allen); Q 51 (Professor Giorgio Fazio) and Q 57 (Tom Box,
Adam Dickinson)
172 Supplementary written evidence from Dr Martin Smith (CRF0069)
173 Ibid.
174 Q 51
175 Q 59
176 Q 51
177 Written evidence from ScreenSkills (CRF0004); Advertising Association (CRF0013) and StoryFutures
Academy (CRF0036)
Facility in 2016, which provided guarantees for bank loans to creative

industries firms.178 Singapore and the Republic of Korea created state-backed
venture capital funds.179 Professor Hye-Kyung Lee, Professor in Cultural
Policy at King’s College London, said the Republic of Korea’s state-backed
venture capital fund “significantly increased capital injection … [and]
provided a fertile ground for the industries to quickly grow.”180 She told us:
“there is a mentality or assumption among policymakers and politicians
that the UK is a financial hub and has a well-functioning, advanced
financial market, so there is no need to be concerned about cultural
financing … The attitude of South Korean policymakers is very different.
They acknowledge cultural businesses’ lack of access to finance and try
to address that by actively engaging with financial markets.”181
88. Dr Martin Smith said there was “too little curiosity in the UK about how
other countries do things and … a pervasive complacency about ‘the UK
model’ and UK global leadership.” He suggested the Government should
examine international work on the role of specialist lenders, relations between
cultural and financial markets, and public–private partnerships.182
89. Kevin Hollinrake MP agreed there were “other things we need to look at
that could change the landscape and improve access to finance for SMEs”.
Julia Lopez MP said innovative firms were “getting bought up and then the
money in innovation is leaving this country.” We heard this was a problem
she “very much want[ed] to address”.183
90. Access to finance remains a problem for SMEs in the creative
industries. A lack of data, investor wariness and overlong processes
present barriers to progress. It is not surprising that businesses turn
to overseas investors, sell up or move abroad.
91. The Government should work with the Creative Industries Council
to explore international lessons for improving access to finance. It
should set out its plans to address access to finance problems in the
forthcoming Sector Vision.
Business guidance
92. Witnesses told us there were many sources of guidance and business
support, but the system for providing them was fragmented and confusing.
We heard that small organisations found it particularly hard to understand
various sources of funding and guidance. As Dr Molly Morgan Jones,
Director of Policy at the British Academy, told the Committee, “They are
just overwhelmed … There is something about simplification of the system
that needs to occur”.184
178 European Commission, ‘Creative Europe’s guarantee facility for the cultural and creative sectors’
(2016): https://ec.europa.eu/commission/presscorner/detail/it/MEMO_16_2346 [accessed 2
December 2022]
179 Written evidence from the Advertising Association (CRF0013)
180 Hye-Kyung Lee, ‘Supporting the cultural industries using venture capital: a policy experiment from
South Korea’, Cultural Trends, vol. 31 (2022), pp 47–67: https://doi.org/10.1080/09548963.2021.19269
31 [accessed 3 December 2022]
181 Q 115
183 Q 141
184 Q 79
93. This echoed recent surveys of creative businesses, which reported

difficulties accessing support services at the local level. Some suggested
local enterprise partnerships185 should act as a “one-stop shop” for advice.186
Dr Martin Smith noted the potential of local enterprise partnerships but
said they varied “hugely in capability, scale and resource”.187 Councillor Phil
Seeva of the Local Government Association agreed that “local authorities
do not always understand the creative industries” and emphasised the need
for organisations such as the Local Government Association to provide
guidance.188
94. We heard that better support for setting up and running a business would be
helpful, including how to manage cash flow, tax, pensions and legal issues.189
Adam Dickinson and Tom Box said they had faced difficulties navigating
such areas when establishing their firms.190 Professor Feng Li of Bayes
Business School, City, University of London told us:
“business training and education is urgently needed … It should be
noted that historically many creative talents … often lack the financial
resources and time to attend high quality business courses to develop
commercial awareness and business skills. Adequate financial support
to creative talents is required to make such initiatives viable. This is one
area where policy interventions are likely to be highly effective.”191
95. There are Government initiatives aimed at tackling some of these challenges.
The Creative Scale Up Programme, piloted as part of the 2018 industrial
strategy,192 was welcomed by industry figures.193 In 2022 the Government
announced this would be expanded into the Create Growth Programme,
providing six local area partnerships outside London with £1.275 million
each over three years. The programme offers a range of business advice and
training services. Its outcomes are not yet clear, but we noted the number of
regions benefiting was limited.194
96. There is a welcome range of schemes providing business support
and guidance. But they remain disjointed and hard to navigate,
particularly for small organisations. The Government’s recent
185 Local enterprise partnerships are voluntary partnerships between local authorities and businesses,
with the aim of determining local economic priorities and generating jobs in the local area. They
were set up in 2011 to replace regional development agencies (non-departmental public bodies which
funded projects and coordinated stakeholders). Local enterprise partnerships originally received no
public funding, with funds later made available on a competitive basis.
186 Claudia Burger, ‘How policymakers can support local growth in the creative industries’ (25 February
2020): https://pec.ac.uk/policy-briefings/how-policymakers-can-support-local-growth. [accessed 2
December 2020]
188 Q 108
189 Creative Industries Federation, ‘Growing the UK’s Creative Industries: What creative enterprises
need to thrive and grow’ (7 December 2018), p 39: https://www.creativeindustriesfederation.com/
sites/default/files/2018–12/Creative%20Industries%20Federation%20-%20Growing%20the%20
UK’s%20Creative%20Industries.pdf [accessed 21 November 2022]
190 Q 60
191 Written evidence from Professor Feng Li (CRF0019)
192 DCMS, ‘£20 million to boost creative industries across England’ (7 December 2018): https://www.gov.
uk/government/news/20-million-to-boost-creative-industries-across-england [accessed 2 December
2022]
193 Claudia Burger Eliza Easton,and Hasan Bakhshi, ‘Creative places: Growing the creative industries
across the UK’ (13 July 2021): https://pec.ac.uk/policy-briefings/resilience-in-places-growing-the-
creative-industries-across-the-uk [accessed 2 December 2022]
194 Q 132
Create Growth Programme to support SMEs is welcome but limited

in scale. The Government should monitor the impact of the Create
Growth Programme, identify its most effective interventions and
help local authorities share key learnings across the country.
97. The Government should work with local authorities to help
consolidate guidance for creative sector businesses into easily
accessible support hubs. Local enterprise partnerships provide a
good vehicle for delivering this work.
Access to space
98. Access to affordable workspace was another issue raised in our inquiry. Adam
Dickinson told us this was one of the biggest obstacles small businesses were
currently facing.195 Research by the Creative Industries Policy and Evidence
Centre suggests that access to work and studio space on a long-term basis is
important to an organisation’s ability to run efficient operations and build
profitable networks. Those without access to spaces may struggle to benefit
from the clusters that are key to the creative sector’s success.196
99. We heard of models for improving access to space. Creative Land Trusts,
for example, involve a blend of funding from donors, investors and grants
to purchase freeholds or long leases of permanent, affordable workspaces.
The first Creative Land Trust was founded in 2020 by the Mayor of
London, Arts Council England, Bloomberg Philanthropies and Outset
Contemporary Art Fund. It plans to secure 1,000 studio spaces by 2025.197
It is being replicated in Margate, with a Creative Land Trust established
by Thanet District Council via investment from the Government’s Towns
Fund.198 Manchester is reportedly also interested in establishing a Creative
Land Trust.199 Researchers from the University of Exeter, who studied the
needs of creative businesses in Devon and Cornwall, suggested Creative
Land Trusts and similar models merit further investment and research.200
100. Lack of access to affordable premises inhibits the growth of creative
SMEs. Better co-location programmes could reduce overheads and
encourage profitable exchanges of ideas and people. The Creative
Industries Council should work with the Department for Levelling
Up, Housing and Communities to evaluate options for improving
long-term access to affordable workspaces for creative businesses,
such as building on the Creative Land Trust programme.
Supporting innovation in institutions and organisations receiving

public funding
101. We heard concern that digital innovation in creative sector institutions and
organisations receiving public funding will come under growing pressure
in the next few years. This threatens the UK’s position as an international
195 Q 57
196 Lucy McFadzean, Gabriella Giannachi, Joanne Evans, ‘Creative Industries Innovation in Seaside
Resorts and Country Towns’ (1 September 2022): https://pec.ac.uk/discussion-papers/seaside-resorts-
and-country-towns [accessed 2 December 2022]
197 Creative Land Trust, ‘About Us’: https://creativelandtrust.org/about-us/ [accessed 2 December 2022]
198 Written evidence from Greater London Authority (CRF0020)
199 Ibid.
200 Lucy McFadzean, Gabriella Giannachi, Joanne Evans, ‘Creative Industries Innovation in Seaside
Resorts and Country Towns’ (1 September 2022): https://pec.ac.uk/discussion-papers/seaside-resorts-
and-country-towns [accessed 2 December 2022]
leader in this area. Chris Michaels, Digital Director of the National Gallery,
said that innovation in the cultural sector had accelerated over the last eight
years, stimulated in part by Government funding. However, he warned:
“There is a risk of that going away in the next couple of years. On one
side, you have incredible cost pressures on cultural organisations …
inflationary pressures, and potential cuts coming in the next government
budget. Those cost pressures risk closing that window of innovation
again. If some of that government support in external funding goes
away, you take away the gains of the last 10 years.”201
102. We noted consequent risks to both the civic value produced by cultural
organisations,202 and the economic benefits of R&D in organisations
receiving public funding. Annette Mees, Visiting Senior Research Fellow
in Culture and Creative Industries at King’s College London, emphasised
the importance of talent and innovation flowing “from commercial to
non-commercial and back.”203 In 2018 Arts Council England reported it
had awarded £440 million to organisations that subsequently generated
approximately £3.4 billion in VAT, corporation tax, income tax and national
insurance contributions.204
103. Dr Darren Henley, Chief Executive Officer of Arts Council England, said
there was a range of initiatives and funding streams to foster innovation in
new technologies.205 We noted however that funding streams are disparate
and complex;206 integrating good practice remains challenging;207 and the
stop-start nature of grants makes it hard to support cross-disciplinary
collaboration or help shift business models towards long-term financial
sustainability.208
104. We explored what organisations should do to make the most of the limited
funding available. Dr Henley emphasised the importance of creating
opportunities “where commercial money and public sector money can come
together”.209 Chris Michaels believed that cultural organisations could do
more to develop partnerships to share costs over new technology-related
projects, and try to avoid developing one-off ventures:
“Finding multiple reapplications is always the thing. That has been a big
challenge in the cultural sector. The network effect of how to get reuse
201 Q 57
202 For further details on civic value of the arts see UKRI, Understanding the value of arts & culture, the
AHRC cultural value project (2021): https://www.ukri.org/wp-content/uploads/2021/11/AHRC-291121-
UnderstandingTheValueOfArts-CulturalValueProjectReport.pdf [accessed 1 December 2022].
203 Q 3
204 Cebr for Arts Council England, Contribution of the arts and culture industry to the UK economy
(May 2020), p 8: https://www.artscouncil.org.uk/research-and-data/contribution-art-and-culture-
sector-uk-economy [accessed 1 December 2022]
205 Q 121. See also for example the Digital R&D Fund for the Arts with Nesta and the Arts and
Humanities Research Council; Creative XR with Digital Catapult; the UK–Canada Immersive
Exchange; and a new category of organisations funded through the National Portfolio Organisations
funding programme for 2023–26 which will help other organisations to innovate digitally. For further
detail see Arts Council England, ‘Our open funds’: https://www.artscouncil.org.uk/our-open-funds
[accessed 3 December 2022].
206 QQ 120, 141
207 Q 9 (Tonya Nelson)
208 Supplementary written evidence from Annette Mees (CRF0071)
209 Q 121
and collaboration across multiple places is what has held back a lot of
this stuff from proper adoption.”210
105. The UK is rightly regarded as an international leader in the arts.
Technological innovation and talent exchanges between public and
private organisations will be key to the sector’s future success. We
welcome Arts Council England’s existing support for improving
innovation and digital competence in organisations.
106. We recommend Arts Council England works with the Government to
incentivise further collaboration between the commercial and non-
profit sector to support innovation. This could include Government-
backed incentives for SMEs to collaborate with arts organisations,
for example. We also recommend that Arts Council England plays
an enhanced role in providing coordination among organisations
receiving public funding, to support cost sharing on expensive
projects and ensure the widest possible reuse of new initiatives.
210 Q 58
Chapter 4: SKILLS
107. Skills shortages are pressing across the economy,211 but are particularly acute
in the creative industries. The Rt Hon Robert Halfon MP, Minister of State
for Skills, Apprenticeships and Higher Education, said that “88 per cent
of employers in the creative occupations find it hard to recruit higher-level
skilled individuals, compared to around 38 per cent of employers across
the economy.”212 Seetha Kumar, CEO of ScreenSkills, told us that in the
screen sectors, “skills are currently the biggest single inhibitor to growth.”213
Tom Box, Managing Director of animation studio Blue Zoo, said his
company was having to turn away work because of a lack of skilled workers.214
108. International competition for creative skills is growing. Dr Martin Smith
told us that “it is certain that the global shortage of skills—creative skills,
technical skills, cultural management skills and business skills—will intensify
as countries compete for regional and global advantage.”215 Games industry
body UK Interactive Entertainment (Ukie) noted that more remote working
had increased the mobility of the workforce and UK firms were increasingly
fighting to secure talent against international competitors.216 This was echoed
by Adam Dickinson, Development Director of virtual reality company Rezzil,
who told us smaller regional businesses were struggling with the expectation
of matching London or international salaries.217
109. We noted that skills shortages were not unique to the creative sector. But
we did hear that there needed to be a greater recognition that investing in
developing a blend of technical and creative skills was a serious commercial
proposition. The highest growth areas such as screen and CreaTech will
increasingly rely on such skillsets. Verity McIntosh, Senior Lecturer in
Extended and Virtual Realities at University of the West of England (UWE),
told us that those who could
“meld science and technology with artistry [are] absolute unicorns
… but increasingly I am finding people come in quite nervous about
whether they are taking a risk by investing in their own creativity. We
have to tell them that it is worth it”.218
Identifying skills shortages and the data gap

110. We heard that skills gaps were widespread. Eliza Easton, Deputy Director
of the Creative Industries Policy and Evidence Centre (PEC), told us the
most common shortages reported to the PEC were in digital, design and
craft skills.219 The BFI Skills Review 2022 estimated that film and high-
end television will require between 15,130 and 20,700 additional full-
211 For further information on skills needs see CBI, Delivering a labour market that supports growth (26
July 2022), available at: https://www.cbi.org.uk/articles/labour-shortages-are-holding-back-growth/
[accessed 4 January 2023]; Department for Education, Labour market and skills demand horizon scanning
and future scenarios (May 2022): https://assets.publishing.service.gov.uk/government/uploads/system/
uploads/attachment_data/file/1077930/Labour_Market_and_Skills_Demand_Horizon_Scanning_
and_Future_Scenarios_FINAL.pdf [accessed 4 January 2023]
212 Q 133
213 Q 74
214 Q 57
215 Written evidence from Dr Martin Smith (CRF0003)
217 Q 57
218 Q 37
219 Q 82
time employees by 2025.220 This did not include visual effects, animation
or unscripted production.221 ScreenSkills said there were already “crucial
pressure points” in entry and mid-tier roles in the screen industries, from 2D
and 3D animators and designers, to sound technicians, to hair and makeup
artists.222 Ukie emphasised the shortage of 3D programming skills in the
video games industry.223
111. We found a lack of consistent data and metrics on skills shortages in the
creative industries. A study by the PEC illustrated this problem: researchers
had to draw on over 300 sources of information for the survey. They found
this “indicative of the challenge of developing a coherent and compelling
narrative” to present to policymakers.224 Dinah Caine, Chair of the Camden
STEAM Commission, told us a lack of data on the creative industries
“because of the way that the DfE collects it … has impacted on investment
in, and concern around, creative courses”.225
112. Official data provide a partial picture, though the Office for National
Statistics’ Standard Industrial Classification codes, used to measure
economic activity and determine the balance of jobs in an industry, did not
have an industry code for computer games, for example.226 Eliza Easton said
the high proportion of freelancers made data collection even more difficult.
She noted the Government was working to improve job classifications, but
progress was slow.227 Dr Lisa Morrison Coulthard, Research Director of the
National Foundation for Educational Research said there was a “need for
the Government to take control.”228
113. Several witnesses said the recent launch of the Unit for Future Skills was a
positive step towards better data collection and collation.229 The Unit was
set up in May 2022 by the Department for Education (DfE) to improve the
quality of jobs and skills data, and to make this information more accessible
to policymakers and the public. The Unit’s stated priority for 2022 was to
develop a workplan focused on four areas:
• an improved careers pathways dashboard, providing more detail on

which qualifications support employment in a local area;
• a skills demand dashboard showing what types of jobs are being

advertised in a locality;
• conducting research projects on future skills demand forecasting and a

UK specific skills taxonomy; and
220 British Film Institute, BFI Skills Review 2022 (29 June 2022), p 8: https://www.bfi.org.uk/industry-
data-insights/reports/bfi-skills-review-2022 [accessed 23 November 2022]
221 Q 74 (Seetha Kumar)
222 Written evidence from ScreenSkills (CRF0004)
224 Heather Carey, Rebecca Florisson and Lesley Giles, Skills, talent and diversity in the creative industries
(November 2019), pp 44–45: https://pec.ac.uk/discussion-papers/skills-talent-and-diversity-in-the-
creative-industries [accessed 23 November 2022]
225 Q 88
226 Q 87
227 Ibid.
228 Q 66
229 Q 66 (Dr Lisa Morrison Coulthard); Q 74 (Dr Molly Morgan Jones) and Q 87 (Eliza Easton)
• gathering feedback from users to help shape the Unit’s products and
longer-term priorities.230
114. Dr Lisa Morrison Coulthard said the Unit for Future Skills presented a “real
opportunity” to make skills policy “properly data driven”.231 Eliza Easton
said it should invest in “real-time mapping, using job adverts to give people a
sense of how many jobs are out there and what they are called.”232
115. The Rt Hon Robert Halfon MP told us the Unit would look at skills shortages
“in micro detail”. He said it had already created a “number of dashboards”.233
116. Skills shortages present a major challenge to the creative industries.
But detailed data on these shortages are limited and fragmented.
This makes it difficult to forecast future requirements and develop
evidence-based policy interventions that target priority areas. We
welcome the launch of the Unit for Future Skills, but there is an
urgent need for progress in its work. The Government should set out
its plans for improving the collection and use of skills data (including
on freelancers) in the creative industries to inform and drive change
in skills policy.
Pre-16 education
117. We heard that the English school system is not preparing students adequately
for careers in the creative industries. Witnesses told us that pre-16 education
plays a key role in providing students with a broad range of skills and
shaping the pathways they then choose to take at 16, from vocational to
higher education. We heard however that careers guidance currently takes
insufficient account of the myriad opportunities in the creative sector.
Witnesses also highlighted how this is exacerbated by the lack of prominence
afforded to creativity234 in the curriculum.
Careers guidance
118. A common theme in our evidence was the lack of awareness among students
of jobs and pathways into the creative industries. Sir Peter Bazalgette noted
that 41 per cent of 16-year-olds “did not know that there was such a thing
as a screen industry career”.235 Tom Box, Managing Director of Blue Zoo
animation studio, said a better understanding of career pathways would
“massively change” the number of young people entering the workforce. He
gave the example of teaching children to code using Python:
“when I have asked school children what they use Python for, they
have said, ‘Oh, my teacher told us it is for building websites.’ They do
not seem to know that the films they have been to see at the weekend,
230 Department for Education, Unit for Future Skills: https://www.gov.uk/government/groups/unit-for-

future-skills [accessed 2 December 2022]
231 Q 66
232 Q 87
233 Q 133
234 The Durham Commission on creativity and education defined creativity as “The capacity to imagine,
conceive, express, or make something that was not there before” and creative thinking as “A process
through which knowledge, intuition and skills are applied to imagine, express or make something
novel or individual in its contexts.” See: Arts Council and Durham University, Durham Commission
on Creativity and Education (2021): https://www.artscouncil.org.uk/sites/default/files/download-file/
Durham_Commission_on_Creativity_04112019_0.pdf [accessed 12 December 2022]
235 Q 125
whether it is Star Wars or Marvel, have used Python at the back-end to

create all the visual effects on that film.”236
119. Education and training providers have a duty to provide pupils with
independent careers guidance from Years 8 to 13. From 1 January 2023,
the Skills and Post-16 Education Act made it a legal requirement for schools
to ensure all pupils in Years 8 to 13 have at least six opportunities to meet
providers of approved technical education qualifications or apprenticeships.237
The Careers & Enterprise Company was established in 2014 to support
providers, training teachers to deliver guidance and establishing Careers
Hubs of secondary schools, colleges and business partners; 45 per cent
of mainstream schools and colleges are part of the model.238 However,
Kevin Hollinrake MP, Parliamentary Under Secretary of State at the
Department for Business, Energy and Industrial Strategy, acknowledged:
“We talk to too many businesses that say they have never heard of the Careers
& Enterprise Company, so there is definitely a big opportunity there”.239
120. The Department for Education expects all schools and colleges to use the
internationally recognised Gatsby Benchmarks for careers guidance. The
benchmarks are non-statutory but provide a framework.240
Figure 3: Gatsby Benchmarks
Benchmark 1
A stable careers programme
Benchmark 2
Learning from career and labour market information
Benchmark 3
Addressing the needs of each pupil
Benchmark 4
Linking curriculum learning to careers
Benchmark 5
Encounters with employers and employees
Benchmark 6
Experience of workplaces
Benchmark 7
Encounters with FE and HE
Benchmark 8
Personal guidance
Source: Gatsby, Good career guidance: Reaching the Gatsby Benchmarks: A handbook for secondary schools,
(2018): https://www.gatsby.org.uk/uploads/education/good-career-guidance-handbook-digital.pdf [accessed 2
December 2022]
236 Q 59
237 Department for Education, Careers boost for young people (5 January 2023): https://www.gov.uk/
government/news/careers-boost-for-young-people [accessed 10 January 2023]
238 Written evidence to the Youth Unemployment Committee inquiry from the Careers & Enterprise
Company, 23 September 2021 (YUN0035)
239 Q 136
240 Department for Education, Careers guidance and access for education and training providers
(September 2022): https://assets.publishing.service.gov.uk/government/uploads/system/uploads/
attachment_data/file/1103188/Careers_statutory_guidance_September_2022.pdf [accessed 30
November 2022]
121. Several witnesses suggested the Gatsby Benchmarks should be further

embedded to improve guidance on creative careers. Olly Newton, Executive
Director of the Edge Foundation, told us the benchmarks
“take us a long way forward, but the challenge is in the delivery. At the
moment, delivery is quite patchy … all schools need to have a careers
leader. That could be someone whose full-time role is as a careers
leader, which is wonderful, or it could be the geography or PE teacher’s
Wednesday afternoon job.”241
122. The Edge Foundation has called for a statutory entitlement for all young
people to workplace experience offering a range of pathways.242 The House
of Lords Youth Unemployment Committee recommended making careers
guidance a compulsory element of the primary and secondary curriculum.243
In January 2023, the Government announced a new careers programme for
primary schools, to be delivered by the Careers and Enterprise Company.
The programme will be targeted at 55 disadvantaged areas of the country
where school outcomes are the weakest.244
123. Better data are also needed. Eliza Easton told us that official statistics on
creative industries were “outdated … in the kinds of jobs they highlight
… I have sympathy with [careers advisers] who are trying to wrap their
heads around a sector that has changed so quickly.”245 Dinah Caine said
careers guidance must be informed by “market intelligence, labour market
information and future facing information.”246
124. Julia Lopez MP hoped initiatives such as a new £950,000 Creative Careers
Programme would help, “because there is a disconnect at the moment
between education providers and the jobs that are actually being created.”247
She noted a “wider perception shift” was still needed in Government and
society around the “fulfilling and lucrative careers” possible within the
creative industries.”248
125. Careers guidance at school on the creative sector is vital. But its
current provision is not good enough. Delivery is patchy and disjointed.
Information about careers in the creative sector is too often out of
date. The Careers & Enterprise Company does important work but is
insufficiently well known. We were pleased that ministers recognised
the need for improvements. The Government should work with
education leaders and industry bodies to promote the work of the
Careers & Enterprise Company. Programmes providing guidance
on routes into the creative sector need to be expanded.
126. The Gatsby Benchmarks provide a good opportunity for influencing
the provision of careers guidance. The Benchmarks’ guidance should
be revised to include references to careers in the creative industries.
241 Q 87
242 Edge Foundation, ‘Schools Education—Coherent, Unified, Holistic’: https://www.edge.co.uk/policy/
support-us/schools-and-14-19-education-coherent-unified-holistic/ [accessed 2 December 2022]
243 Youth Unemployment Committee, Skills for every young person (Report of Session 2021–22, HL Paper
98) para 119
244 Department for Education, ‘Careers boost for young people’ (5 January 2023): https://www.gov.uk/
government/news/careers-boost-for-young-people [accessed 5 January 2023]
245 Q 87
246 Ibid.
247 Q 136
248 Q 137
127. We endorse the recommendation of the House of Lords Youth

Unemployment Committee that careers guidance be made a
compulsory element of the primary and secondary curriculum.
Creativity in school
128. As noted in Chapter 2, the increasing digitalisation of the creative industries
has led to a growing need for individuals with both creative and technical
skills. Dinah Caine raised concerns about a “divide between STEM249
subjects and creative and arts subjects”, and said it was crucial to have an
education system which “recognises the strength of each and brings them
together”.250
129. There have been ongoing calls for the Government to support a STEAM251
agenda, which would encourage studying STEM subjects in combination
with arts and design-based courses.252 We also heard that developing
creativity is not restricted to ‘creative subjects’:253 witnesses noted that all
subjects, including maths and engineering, can be taught in a way that
fosters creativity.254
130. Trends in GCSE entries show a decline in take-up of courses offering a
combination of creative and technical subject matter.255 As Figure 4 shows,
there has been a 70 per cent decline in GCSE entries in design and technology
between 2010 and 2021. Eliza Easton noted that some of the biggest skills
gaps in the creative economy related closely to topics that could be taught in
design and technology courses.256 There has also been a 40 per cent decline
in GCSE entries in other creative subjects.257
249 Science, Technology, Engineering and Maths.

250 Q 82
251 STEM plus Arts & Design
252 Creative Industries Policy and Evidence Centre, Skills, talent and diversity in the creative industries
(November 2019): https://pec.ac.uk/discussion-papers/skills-talent-and-diversity-in-the-creative-
industries [accessed 1 December 2022]
253 ‘Creative subjects’ typically include Design & Technology, drama, media, film, TV studies, music,
performing arts.
254 Q 83 (Dinah Caine) and Q 84 (Eliza Easton)
255 Written evidence from the Crafts Council (CRF0005)
256 Q 82
257 Youth Unemployment Committee, Skills for every young person (Report of Session 2021–22, HL Paper
98), Figure 14
Figure 4: Design and technology GCSE entries since 2010
300,000
270,000
250,000
200,000
150,000
100,000
83,000
50,000
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Source: Joint Council for Qualifications CIC, ‘Examination results’: https://www.jcq.org.uk/examination-results/

131. We examined the relationship between these declines and the incentives
created by the English Baccalaureate. The Government introduced the
English Baccalaureate (EBacc) in 2010. It provided a measurement for the
number of secondary school pupils taking, and performing well, in:
• English literature and language
• Maths
• Sciences
• History or geography
• A modern foreign language.

132. The EBacc is not compulsory but is encouraged. According to the
Government, EBacc subjects are “considered essential to many degrees and
open up lots of doors.”258
133. We heard that this sent a message that creative knowledge and skills were
not a route to jobs, exacerbating the issue of inadequate careers guidance.
Dinah Caine told us for example that the EBacc made creative and
interdisciplinary teaching much harder in secondary school than in primary
school.259 The House of Lords Youth Unemployment Committee found in
2021 that the national curriculum and the EBacc were “too narrowly focused
to ensure that [they prepare] all young people for the modern labour market
and the essential, technical and creative skills it requires, in particular for the
creative, green and digital sectors.”260
258 Department for Education, ‘English Baccalaureate’ (2019): https://www.gov.uk/government/

publications/english-baccalaureate-ebacc/english-baccalaureate-ebacc [accessed 1 December 2022]
259 Q 82
260 Youth Unemployment Committee, Skills for every young person (Report of Session 2021–22, HL
Paper 98), para 82
134. Alun Francis, Chief Executive of Oldham College, cautioned that sweeping
changes to the overall pre-16 education system could be challenging and
disruptive.261 We noted however that useful changes could be made within
existing frameworks, illustrated for example by Camden Council’s STEAM
Hub.262 As Sir Peter Bazalgette argued, the Department for Education is
“normally on the receiving end of everybody telling them their subject is the
most important thing in the world”, but the issue of preparing students for the
future is much “wider” than advocating for changes to the core curriculum.263
A 2018 report by Nesta and the Creative Industries Federation for example
recommended that Ofsted ‘Outstanding’ ratings should only be given to
schools that can demonstrate excellence in creative and technical teaching as
well as in “academic subjects.”264
135. The Rt Hon Robert Halfon MP told us the Government had no plans to
change the EBacc, but maintained he “would absolutely like to see more
students doing creative subjects and creative GCSEs”.265 He emphasised the
Government’s National Music Plan, forthcoming Cultural Education Plan
and £115 million investment in arts, culture and heritage subjects.266
136. Employers are increasingly calling for a blend of creative and digital
skills. This interdisciplinary approach needs to be encouraged
at school. Yet there are too few incentives for students to study a
combination of creative and STEM subjects. The Government has
been clear it has no plans to expand the EBacc. While this is a matter
of regret, we have heard that improvements can be made without
wholesale reform to the education system.
137. The Department for Education must tackle the decline in take up
of school subjects relevant to the creative industries—particularly
Design and Technology. It should start by urgently promoting the
value of creative subjects and highlighting the rewarding career
opportunities they can offer. It should also review other options,
such as including a greater focus on creative education in Ofsted’s
inspection regime. The Department should provide an initial update
on its plans in response to this report and a further update by the
end of June 2023.
Post-16 education
138. Post-16 education is key to developing individuals with skills relevant to the
creative industries. We heard that the provision of courses was extensive
but fragmented and confusing. Robert West said there were “circa 400
qualifications available to employers, but they do not always align to local
skills needs or local sector needs.”267 Seetha Kumar of ScreenSkills told us
there were:
261 Written evidence from Alun Francis (CRF0070)

262 Further supplementary written evidence from Danielle Tobin and Dinah Caine, Camden STEAM
(CRF0067)
263 Q 127
264 Creative Industries Federation and Nesta, Creativity and the Future of Work (27 March 2018) p 3:
Available at https://www.nesta.org.uk/report/creativity-and-the-future-of-work/ [accessed 21
December 2022]
265 Q 137
266 Ibid.
267 Q 79
“4,120 creative courses in higher education—across animation, film,

games, television, media production, screenwriting, post-production
and visual effects—yet you have employers saying, ‘We cannot get
people that we can recruit’ … The problem is the disconnect.”268
139. This problem is particularly pronounced in vocational education.
Simon Field, Director of the consultancy Skills Policy, noted that students
were faced with a choice “between a Higher National Diploma, a Diploma in
Higher Education, a Foundation Degree and a level 5 apprenticeship”. These
were offered “without any real guidance about the distinctions between these
options or their relative value.”269
140. In December 2018 the then Secretary of State for Education announced
proposals to introduce employer-led national standards for higher technical
education, through which high-quality qualifications would be recognised
with kitemarks.270 Several kitemarking schemes in the creative industries
have since been developed.271 Creative industry leaders surveyed by the PEC
in 2019 were generally unfamiliar with these kitemarking schemes, though
supported the idea.272
141. Recent governments have acknowledged the need to simplify the post-
16 education system. In 2021 the Government announced reforms to
“streamline and improve the quality” of level 3 qualifications,273 and noted
the education and skills system had been “less successful in consistently
guiding students towards the courses or the jobs that will benefit them, and
the country, the most.”274 This involved the introduction of T Levels as the
main vocational alternative to A Levels, and the removal of funding approval
for 16–19 qualifications that overlap with them.275
142. Post-16 education plays a critical role in developing skills for the
creative industries. But training pathways are confusing for students
and employers. Clearer routes into the industry are needed.
268 Q 76
269 Simon Field, Beyond the missing middle: developing higher technical education (November 2020), p 47:
https://www.gatsby.org.uk/uploads/education/beyond-the-missing-middle-pvw.pdf [accessed 10
January 2023]
270 Department for Education, ‘Damien Hinds Technical Education Speech’ (December 2018): https://
www.gov.uk/government/speeches/damian-hinds-technical-education-speech [accessed 24 November
2022]
271 ScreenSkills, ‘Why choose a ScreenSkills Select Course?’: https://www.screenskills.com/training/
screenskills-select/why-choose-a-screenskills-select-course/ [accessed 24 November 2022]
272 Creative Industries Policy and Evidence Centre, Insights from our Industry Champions: The Value of
Creative Higher and Further Education (October 2019): available at https://pec.ac.uk/policy-briefings/
insights-from-our-industr y-champions-the-value-of-creative-higher-and-further-education
273 Department for Education, Review of post–16 qualifications at level 3 in England: Policy Statement (July
2021) p: 4 https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_
data/file/1003821/Review_of_post-16_qualifications_at_level_3_in_England_policy_statement.pdf
T Levels
143. T Levels are vocational equivalents to A Levels, consisting of 80 per cent
classroom learning and 20 per cent industry placement. The first T Level
students started in September 2020. From 2023, it is expected that 24 T
Levels covering 11 technical education routes will be available.
144. Witnesses told us T Levels were welcome but could be better aligned with
the needs of the creative industries. Dinah Caine praised T Levels as an
“excellent idea”, but said that the 45-day work experience placements with
a single employer were “almost impossible” for creative employers to deliver
due to the short-term, project-based nature of work in much of the sector.276
Seetha Kumar told us T Levels “just do not work” for screen industries
and argued that Government should engage more closely with industry in
developing courses.277 For example, confidentiality clauses and industry
regulations prevent those under 18 from working on film and television
production.278
145. Prior to the introduction of T Levels some creative industries employers
expressed dissatisfaction with the quality of further education courses,
noting particular concerns about the lack of emphasis on business and
communication skills.279 The ‘Craft and Design’ and ‘Media, Broadcast
and Production’ T Levels due to start in September 2023 are described on
the Government website as covering “the creative economy” as part of the
courses’ core content.280
146. When we questioned ministers about their plans to address employer concerns,
Julia Lopez MP acknowledged “challenges with the work placements”; small
businesses in particular find it harder to accommodate the work experience
required.281
147. T Levels provide a key vocational route into creative occupations.
But some adjustments may be needed to ensure they deliver on their
objectives. The requirements for workplace placements are hard
for many creative sector businesses to provide. And business skills
must feature more prominently in the content of courses aimed at the
creative industries, given the high proportion of freelancers in the
sector. Closer collaboration between the Department for Education
and the Department for Digital, Culture, Media and Sport will be
key to making these changes a success.
148. The Department for Education must work closely with the
Department for Digital, Culture, Media and Sport in keeping under
review the content and structure of T Level courses relating to the
creative industries.
276 Q 85
277 Q 79
279 Creative Industries Policy and Evidence Centre, Insights from our Industry Champions: The Value of
Creative Higher and Further Education (October 2019): available at https://pec.ac.uk/policy-briefings/
insights-from-our-industr y-champions-the-value-of-creative-higher-and-further-education
280 HM Government, ‘T levels’: https://www.tlevels.gov.uk/ [accessed 5 December 2022]
281 Q 135
Apprenticeships
149. An apprenticeship programme involves 20 per cent classroom study and 80
per cent practical training. Apprenticeship programmes are funded by the
Apprenticeship Levy. Since the levy was introduced in 2017, there have been
calls to reform it to be more flexible. The 12-month contract rule can be
difficult to commit to for creative businesses where work is typically project-
based and shorter term.282 Our predecessor committees have repeatedly
called for reform of the Apprenticeship Levy.283
150. In February 2022 the Government introduced Flexi-Job Apprenticeships,
designed to ensure that those sectors with non-standard employment models
could access the benefits of apprenticeships. Under this scheme, an apprentice
may secure multiple short employment contracts directly with businesses,
or via an agency.284 Pact, the UK screen sector trade body, welcomed the
pilot, though noted it is too early to tell whether the changes are working.285
The National Theatre also welcomed the Flexi-Job Apprenticeships but
raised concerns around “the lack of financial provision to learning providers
delivering these apprenticeships models.”286
151. Many witnesses repeated existing concerns about the main apprenticeship
scheme, suggesting the flexi-job scheme would benefit from more publicity.287
Dr Lucy McFadzean, Professor Gabriella Giannachi and Joanne Evans from
the University of Exeter recommended that the Institute for Apprenticeships
and Technical Education accelerates the availability of flexible apprenticeships
in creative sector occupations outside the large organisations currently
taking part in the pilot, such as the BBC.288 Alun Francis noted the success
of group training associations in other sectors such as construction, which
the creative sector may be able to learn from.289
152. The apprenticeship scheme remains poorly suited to a large proportion
of creative businesses, who are unable to provide the required
length of training placements due to the short-term, project-based
nature of much work in the sector. We welcome the recent launch of
the pilot of flexi-job apprenticeships. We recommend the flexi-job
apprenticeships pilot is promoted more widely.
Higher education
153. We heard the economic potential of the creative sector is built on a variety
of roles and qualifications, including higher education. Ed Shedd, Partner in
Technology, Media and Communications at Deloitte, told us “the creative
services sector has a very diverse set of jobs. It is very inclusive. It appeals to
282 Written evidence from ScreenSkills (CRF0004) and Equity (CRF0010); Q 60 (Tom Box)
283 Communications Committee, UK advertising in a digital age (1st Report, Session 2017–19, HL Paper
116), paras 181–182; Communications and Digital Committee, Public service broadcasting: as vital as
ever (1st Report, Session 2019, HL Paper 16), para 123; Communications and Digital Committee,
Breaking news? The future of UK journalism (1st Report, Session 2019–21, HL Paper 176), para 174
284 Education and Skills Funding Agency, ‘Flexi-Job Apprenticeships’ (3 August 2021): https://www.gov.
uk/guidance/flexi-job-apprenticeship-offer [accessed 8 December 2022]
285 Written evidence from Pact (CRF0029)
286 Written evidence from the National Theatre (CRF0033)
287 Written evidence from Equity (CRF0010); Advertising Association (CRF0013) and UK Interactive
Entertainment (CRF0025)
288 Written evidence from Dr Lucy McFadzean, Professor Gabriella Giannachi, Joanne Evans (CRF0011)
289 Written evidence from Alun Francis (CRF0070)
the graduates of this world, and it employs those who want to do vocational
jobs.”290
154. We noted however that the balance of qualifications studied by new and
prospective entrants to sector is not aligned with business needs. The creative
workforce is more likely to hold a higher education degree than the overall
workforce: 75 per cent compared to 44 per cent.291 However, this did not
necessarily reflect the needs of the sector. As ScreenSkills told us:
“Higher Education courses fail to train individuals for the skills that our
sector needs: film studies or TV broadcasting courses do not relate to
the occupations we actually need to train people for, and in some cases
overshoot i.e., training at level 3 and level 4 within further education is
often sufficient to support candidates to progress into roles within the
sector.”292
155. The Rt Hon Robert Halfon MP acknowledged the need for balance between
university and vocational qualification.293
156. The UK should be well placed to produce graduates who will meet the
needs of the creative industries future workforce. Verity McIntosh noted that
while other countries, particularly in Asia, were strong in producing highly
skilled science and technology graduates, the UK had the opportunity to
produce graduates who were highly skilled at the intersection of creativity
and technology. She told us “my graduates … in that middle space between
arts and creativity and technology … are ridiculously employable. They
cannot fend off offers quick enough.”294 The Royal College of Art notes that
it is “vital that the Government does not allow a narrative to develop which
positions arts degrees as leading to lower quality careers”.295
157. However, we heard that the Government has not been taking proper account
of the value of creative higher education courses. Caroline Norbury, Chief
Executive of Creative UK, told us there was “worrying rhetoric about creative
degrees being low value.”296 Dr Molly Morgan Jones said “universities are
closing or being asked to close or justify low-value courses. We would argue
that it is not happening on the basis of evidence that is being looked at in a
holistic way.”297 Witnesses told us that the Office for Students had introduced
a measurement of ‘low value’ courses which did not reflect the economic
contributions of creative graduates: creatives often begin as freelancers, start
their own businesses and salaries tend to remain lower for longer than in
other occupations before a later increase.298
158. The Department for Education’s sweeping rhetoric about ‘low value
courses’ is unhelpful. We agree that universities should provide good
value for money. But the Department must also acknowledge that
many of those going into the creative industries will work flexibly,
290 Q2
291 Q 72 (Lesley Giles)
293 Q 136
294 Q 37
295 Written evidence from Royal College of Art (CRF0041)
296 Q6
297 Q 80
298 Q 76 (Dr Molly Morgan Jones) and Creative Industries Policy and Evidence Centre, ‘For love or
money?’: https://pec.ac.uk/research-reports/for-love-or-money [accessed 5 December 2022]
in freelance roles, and take time to generate higher salaries. That

does not mean their studies and subsequent jobs are less worthwhile.
The Department for Education, in providing strategic direction to
the Office for Students, should change its approach to ‘low value
courses’ to take better account of the realities of work in the creative
industries. This should take more detailed account of business
lifecycles and freelance work.
Lifelong learning
159. Given the pace of technological change, much of our evidence indicated
that workers will need to be continually upskilled as the creative industries
change.299 Robert West of the CBI told us that 80 per cent of 2030’s workforce
was already in the labour market, and therefore “reskilling and upskilling
people who are already working in the creative industries … is the biggest
game in town”.300 Some witnesses suggested the UK did not have a culture
of investing in adult learning in the same way as other countries.301
160. The Skills and Post-16 Education Act 2022 introduced a number of measures
including a Lifelong Loan Entitlement (LLE). The Government said the
LLE will from 2025 provide individuals with a loan entitlement equivalent
to four years of post-18 education to use over their lifetime. It will be available
for modular and full-time study at higher technical and degree levels (levels
4 to 6), regardless of whether they are provided in colleges or universities.302
Witnesses referred to the Lifelong Loan Entitlement, currently under
consultation, as “critical” and potentially “transformational”.303
161. Previously, the November 2020 Spending Review announced a lifetime skills
guarantee, providing adults with free access to level 3 qualifications in a range
of subjects identified as growth areas. Initially open in the first year only to
adults who had not previously achieved a level 3 qualification, as of April
2022 the programme was expanded to all adults. Though mostly in areas
like engineering, health, construction and accountancy, two qualifications
relevant to the creative industries, Digital Product Design and Games
Technologies, are offered. Lord Watson of Invergowrie, Shadow Minister for
Education, questioned why nearly a million ‘priority’ jobs, including creative
and digital roles such as architects and programmers, were excluded from
the lifetime skills guarantee.304
162. The University of the Arts London welcomed the Government’s LLE as
an opportunity to upskill and reskill a cohort of creative sector workers at a
time of technological change. The university said that, since creative skills
featured minimally in the lifetime skills guarantee, it was “important that
creative art and design is not exempt from the LLE and that individuals are
not discouraged from taking up those subjects.”305
299 Written evidence from ScreenSkills (CRF0004); Advertising Association (CRF0013); The Society of
Authors (CRF0031); The National Theatre (CRF0033); Creative Informatics (CRF0035) and UK
Music (CRF0037)
300 Q 74
301 Q 93 (Simon Field) and Q 97 (Corienne Peasgood)
302 Department for Education, Lifelong Loan Entitlement Government Consultation (24 February 2022),
p 8: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/
file/1056948/CP_618_Lifelong_Loan_Entitlement_Consultation_print_version.pdf [accessed 5
December 2022]
303 Q 97 (Corienne Peasgood; Dr Paul Thompson)
304 HL Deb, 12 May 2021, cols 41–45
305 Written evidence from University of Arts London (CRF0044)
163. The new Lifetime Skills Guarantee and Lifelong Loan Entitlement are
welcome. Courses available as part of the Lifetime Skills Guarantee
and Lifelong Loan Entitlement should be informed by labour market
data on creative industry skills needs.
Improved coordination
164. As noted above, we heard employers desired greater engagement with
education institutions to make sure training meets the needs of industry.
However, we heard that businesses faced difficulties with engagement.
165. Many witnesses told us they wanted the Government’s business and skills
policy to be better joined up, and for the Government to play a stronger
coordinating role between education and industry. Professor Steven Spier,
Vice-Chancellor of Kingston University, argued that “education and
business policy are completely siloed … Sometimes you feel like the DfE is
pulling against what DCMS or BEIS is trying to do.”306 Seetha Kumar noted
that while growth in the screen sectors has been promoted by tax reliefs and
investment in building new studios, these projects were launched without an
accompanying skills plan to supply the people to work there.307
166. One forum for coordinating the needs of the sector and communicating
them to the Government is provided by the Creative Industries Council,
co-chaired by the Secretaries of State for Digital, Culture, Media and Sport
(DCMS) and Business, Energy and Industrial Strategy (BEIS) alongside
an industry co-chair. There is no representation of the Department for
Education (DfE) on the Council. Sir Peter Bazalgette, the industry co-chair,
told us he wanted the Council better to engage DfE.308 He also noted the
level of BEIS engagement was lower than that of DCMS, and emphasised
the importance of maintaining a strong “partnership between the two.”309
167. Professor Steven Spier praised the Creative Industries Council and suggested
the Government could create a similar Skills Council bringing together DfE
and BEIS. Ministers noted DCMS and DfE already co-chair an internal
“creative advisory group” involving industry.310 We heard, however, that
coordination between business and skills policy should be more formalised.
Equity suggested that lessons could be learned from the Welsh Government,
which launched a ‘Creative Skills Action Plan’ in May 2022.311 Professor
Spier argued that the Skills, Apprenticeships and Higher Education Minister
should have a seat in BEIS:
“BEIS is where the discussions about the future world of work are
happening. The Higher Education Minister does not have any part in
those conversations … The skills are going to be delivered by FE and
HE but they are not at the table when these conversations are being
had.”312
168. Engagement between employers and education policy is important,
but too often fragmented or duplicative. The Government should
306 Q 66
307 Q 74
308 Q 129
309 Q 128
310 Q 133 (Robert Halfon MP) and Q 139 (Julia Lopez MP)
312 Q 66
be more active in providing co-ordination. The Creative Industries

Council should have engagement from the Department for Education
to support coordination between creative business needs and skills
policy.
SUMMARY OF CONCLUSIONS AND RECOMMENDATIONS
The case for action

1. In recent years the creative industries have delivered more economic value
than the life sciences, aerospace and automotive sectors combined. The
Government has a major opportunity to put the sector at the heart of its
future growth agenda. It is failing to do so. (Paragraph 21)
2. The Government should commit to placing the creative industries at the heart of its
growth plans. It should explain its rationale for omitting the creative industries from
its Autumn Statement priority growth sectors. (Paragraph 21)
3. We welcome the Government’s plans for a Creative Industries Sector Vision,
which has been delayed since summer 2022. (Paragraph 22)
4. The Government should publish the Sector Vision at the earliest opportunity. The
Government should take account of the conclusions and recommendations in this
report when implementing the Sector Vision’s workstreams. (Paragraph 22)
A digital future
5. The Intellectual Property Office’s proposed changes to intellectual property
law are misguided. They take insufficient account of the potential harm to
the creative industries. They were not even defended by the minister in the
Department for Digital, Culture, Media and Sport whose portfolio stands to
be most affected by the change. Developing AI is important, but it should
not be pursued at all costs. (Paragraph 34)
6. The Intellectual Property Office should pause its proposed changes to the text
and data mining regime immediately. It should conduct and publish an impact
assessment on the implications for the creative industries. If this assessment finds
negative effects on businesses in the creative industries, it should pursue alternative
approaches, such as those employed by the European Union. The Intellectual
Property Office should write to us confirming its plans and timelines in response to
this report. (Paragraph 35)
7. New technologies are making it easier and cheaper to reproduce and distribute
creative works and image likenesses. Timely Government action is needed to
prevent such disruption resulting in avoidable harm, or production moving
to countries with better regulation. (Paragraph 42)
8. The Government should ratify the Beijing treaty on audio-visual performances at
the earliest opportunity. It should set out its timelines for doing so in response to this
report. (Paragraph 42)
9. The UK’s intellectual property framework is respected across the world.
These protections underpin the success of the UK’s creative industry exports.
The Government must not water them down when striking new trade deals.
(Paragraph 47)
10. The Department for International Trade should commit to maintaining the
UK’s existing standards of intellectual property rights in all future trade deals.
(Paragraph 47)
11. Like other sectors, the creative industries are exposed to the opportunities
and threats of automation and job replacement. Workers on lower incomes
and insecure contracts are particularly vulnerable. (Paragraph 54)
12. The Government’s Sector Vision must set out a clear plan for ensuring that its
encouragement of technological change is accompanied by complementary plans to
help the creative industries sustain quality jobs and promote a diverse workforce.
(Paragraph 54)
Improving the business environment

13. We fail to understand UK Research and Investment’s rationale for not
allocating funding to continue the Creative Industries Clusters Programme,
and choosing to prioritise other projects—particularly before the final impact
evaluation has been completed. Current assessments show the programme
has far exceeded expectations in promoting innovation, attracting co-
investment and delivering SME growth. (Paragraph 66)
14. UKRI should review its funding allocations and identify options for continuing the
most successful clusters within the Creative Industries Clusters Programme after
March 2023. UKRI should publish its plans and decision timelines in response to
this report. (Paragraph 67)
15. The Arts and Humanities Research Council and participating universities should
work with regions which are not part of the Creative Industries Clusters Programme
to share best practice and create links between clusters. (Paragraph 68)
16. The Government’s definition of R&D for tax relief is narrow and restrictive
compared with that in other OECD countries. This risks holding back
innovation in the UK’s creative industries. (Paragraph 76)
17. The Government should change the definition of R&D for the purpose of tax relief
to include more of the creative sector. It should conduct and publish a substantial
review setting out the risks, costs, and benefits of adopting such an approach. It
should start by exploring the OECD definition of R&D tax relief. The Government
should provide timelines for this review in response to this report. (Paragraph 76)
18. Tax reliefs have played an important role in supporting innovation, growth
and international competitiveness in the creative industries. We welcome the
Government’s commitment to continuing such support. But other countries
are increasingly adopting similarly competitive tax relief systems. The UK is
falling behind. (Paragraph 80)
19. The Government’s consultation on creative industry tax reliefs must benchmark UK
incentives against those in other countries to ensure the UK remains competitive.
(Paragraph 80)
20. Access to finance remains a problem for SMEs in the creative industries.
A lack of data, investor wariness and overlong processes present barriers to
progress. It is not surprising that businesses turn to overseas investors, sell
up or move abroad. (Paragraph 90)
21. The Government should work with the Creative Industries Council to explore
international lessons for improving access to finance. It should set out its plans to
address access to finance problems in the forthcoming Sector Vision. (Paragraph 91)
22. There is a welcome range of schemes providing business support and
guidance. But they remain disjointed and hard to navigate, particularly for
small organisations. The Government’s recent Create Growth Programme
to support SMEs is welcome but limited in scale. (Paragraph 96)
23. The Government should monitor the impact of the Create Growth Programme,
identify its most effective interventions and help local authorities share key learnings
across the country. (Paragraph 96)
24. The Government should work with local authorities to help consolidate guidance
for creative sector businesses into easily accessible support hubs. Local enterprise
partnerships provide a good vehicle for delivering this work. (Paragraph 97)
25. Lack of access to affordable premises inhibits the growth of creative SMEs.
Better co-location programmes could reduce overheads and encourage
profitable exchanges of ideas and people. (Paragraph 100)
26. The Creative Industries Council should work with the Department for Levelling
Up, Housing and Communities to evaluate options for improving long-term access
to affordable workspaces for creative businesses, such as building on the Creative
Land Trust programme. (Paragraph 100)
27. The UK is rightly regarded as an international leader in the arts.
Technological innovation and talent exchanges between public and private
organisations will be key to the sector’s future success. We welcome Arts
Council England’s existing support for improving innovation and digital
competence in organisations. (Paragraph 105)
28. We recommend Arts Council England works with the Government to incentivise
further collaboration between the commercial and non-profit sector to support
innovation. This could include Government-backed incentives for SMEs to
collaborate with arts organisations, for example. We also recommend that Arts
Council England plays an enhanced role in providing coordination among
organisations receiving public funding, to support cost sharing on expensive projects
and ensure the widest possible reuse of new initiatives. (Paragraph 106)
Skills
29. Skills shortages present a major challenge to the creative industries. But
detailed data on these shortages are limited and fragmented. This makes
it difficult to forecast future requirements and develop evidence-based
policy interventions that target priority areas. We welcome the launch of the
Unit for Future Skills, but there is an urgent need for progress in its work.
(Paragraph 116)
30. The Government should set out its plans for improving the collection and use of skills
data (including on freelancers) in the creative industries to inform and drive change
in skills policy. (Paragraph 116)
31. Careers guidance at school on the creative sector is vital. But its current
provision is not good enough. Delivery is patchy and disjointed. Information
about careers in the creative sector is too often out of date. The Careers &
Enterprise Company does important work but is insufficiently well known.
We were pleased that ministers recognised the need for improvements.
(Paragraph 125)
32. The Government should work with education leaders and industry bodies to promote
the work of the Careers & Enterprise Company. Programmes providing guidance
on routes into the creative sector need to be expanded. (Paragraph 125)
33. The Gatsby Benchmarks provide a good opportunity for influencing the
provision of careers guidance (Paragraph 126)
34. The Benchmarks’ guidance should be revised to include references to careers in the
creative industries. (Paragraph 126)
35. We endorse the recommendation of the House of Lords Youth Unemployment
Committee that careers guidance be made a compulsory element of the primary and
secondary curriculum. (Paragraph 127)
36. Employers are increasingly calling for a blend of creative and digital skills.
This interdisciplinary approach needs to be encouraged at school. Yet there
are too few incentives for students to study a combination of creative and
STEM subjects. The Government has been clear it has no plans to expand the
EBacc. While this is a matter of regret, we have heard that improvements can
be made without wholesale reform to the education system. (Paragraph 136)
37. The Department for Education must tackle the decline in take up of school subjects
relevant to the creative industries—particularly Design and Technology. It should
start by urgently promoting the value of creative subjects and highlighting the
rewarding career opportunities they can offer. It should also review other options,
such as including a greater focus on creative education in Ofsted’s inspection regime.
The Department should provide an initial update on its plans in response to this
report and a further update by the end of June 2023. (Paragraph 137)
38. Post-16 education plays a critical role in developing skills for the creative
industries. But training pathways are confusing for students and employers.
Clearer routes into the industry are needed. (Paragraph 142)
39. T Levels provide a key vocational route into creative occupations. But some
adjustments may be needed to ensure they deliver on their objectives. The
requirements for workplace placements are hard for many creative sector
businesses to provide. And business skills must feature more prominently
in the content of courses aimed at the creative industries, given the high
proportion of freelancers in the sector. Closer collaboration between the
Department for Education and the Department for Digital, Culture, Media
and Sport will be key to making these changes a success. (Paragraph 147)
40. The Department for Education must work closely with the Department for Digital,
Culture, Media and Sport in keeping under review the content and structure of T
Level courses relating to the creative industries. (Paragraph 148)
41. The apprenticeship scheme remains poorly suited to a large proportion of
creative businesses, who are unable to provide the required length of training
placements due to the short-term, project-based nature of much work in the
sector. We welcome the recent launch of the pilot of flexi-job apprenticeships.
(Paragraph 152)
42. We recommend the flexi-job apprenticeships pilot is promoted more widely.
(Paragraph 152)
43. The Department for Education’s sweeping rhetoric about ‘low value courses’
is unhelpful. We agree that universities should provide good value for money.
But the Department must also acknowledge that many of those going into
the creative industries will work flexibly, in freelance roles, and take time to
generate higher salaries. That does not mean their studies and subsequent
jobs are less worthwhile. (Paragraph 158)
44. The Department for Education, in providing strategic direction to the Office for
Students, should change its approach to ‘low value courses’ to take better account
of the realities of work in the creative industries. This should take more detailed
account of business lifecycles and freelance work. (Paragraph 158)
45. The new Lifetime Skills Guarantee and Lifelong Loan Entitlement are
welcome. (Paragraph 163)
46. Courses available as part of the Lifetime Skills Guarantee and Lifelong Loan
Entitlement should be informed by labour market data on creative industry skills
needs. (Paragraph 163)
47. Engagement between employers and education policy is important, but too
often fragmented or duplicative. The Government should be more active in
providing co-ordination. (Paragraph 168)
48. The Creative Industries Council should have engagement from the Department for
Education to support coordination between creative business needs and skills policy.
(Paragraph 168)
Appendix 1: LIST OF MEMBERS AND DECLARATIONS OF

INTEREST
Members
Baroness Bull
Baroness Buscombe (to 20 October 2022)
Baroness Featherstone
Lord Foster of Bath
Lord Griffiths of Burry Port
Lord Hall of Birkenhead
Baroness Harding of Winscombe
Lord Lipsey
Lord Parkinson of Whitley Bay (from 20 October 2022 to 25 October
2022)
Baroness Rebuck
Baroness Stowell of Beeston (Chair)
Lord Vaizey of Didcot
The Lord Bishop of Worcester
Lord Young of Norwood Green
Declarations of interest
Baroness Bull
Director, No Bull Productions Limited (media and broadcasting; arts
consultancy)
Director, The Rudolf Nureyev Foundation (grant giving organisation)
Chair, Expert Advisory Panel for the Cultural Education Plan
Chair of the panel of judges, The Award for Civic Arts Organisations 2023
Board Member, Fondation En Faveur De L’art Choregraphique, Lausanne,
Switzerland
Baroness Buscombe
Daughter is an actor
Baroness Featherstone
Designer
Lord Foster of Bath
No relevant interests declared
Lord Griffiths of Burry Port
Patron, British Black Classical Foundation
Patron, small museum in North East England
Volunteer, Premier Christian Radio
Writer and Broadcaster, BBC Religious Department
Lord Hall of Birkenhead
Chairman, Frontline
Trustee, National Trust
Trustee, Paul Hamlyn Foundation
Trustee, Oxford Philharmonic Orchestra
Vice-Chairman, London Philharmonic Orchestra
Chairman, Harder Than You Think Ltd
Advisory Board Member, Qwilt
Baroness Harding of Winscombe
Director (unpaid), Jockey Club, which puts on substantial music events on

their racecourses
Lord Lipsey
Chair, Premier Greyhound Racing
Lord Parkinson of Whitley Bay
Baroness Rebuck
Non-executive Director, Penguin Random House UK (book publishing)
Member, General Management Committee, Bertelsmann (international
media corporation)
Non-executive Director, Guardian Media Group (publishing)
Chair, Bertelsmann’s UK Content Alliance
Daughter is Georgia Gould who leads Camden Council and chairs London
Councils
Chair of the Board, Somerset House Trust
Baroness Stowell of Beeston (Chair)
Lord Vaizey of Didcot
Trustee, Tate
Member, Advisory Board, Edge Investment (venture capital)
Adviser, Scale Up Capital (scale-up investors)
Adviser, Authors Licensing and Collecting Society; member attends four
meetings per year to advise on strategy
The Lord Bishop of Worcester
Lord Young of Norwood Green
A full list of Members’ interests can be found in the Register of Lords’ Interests:
https://members.parliament.uk/members/lords/interests/register-of-lords-interests
Appendix 2: LIST OF WITNESSES
Evidence is published online at https://committees.parliament.uk/work/6881/a-

creative-future/publications/ and available for inspection at the Parliamentary
Archives (020 7219 3074).
Evidence received by the Committee is listed below in chronological order of oral
evidence session and in alphabetical order. Those witnesses marked with ** gave
both oral evidence and written evidence. Those marked with * gave oral evidence
and did not submit any written evidence. All other witnesses submitted written
evidence only.
Oral evidence in chronological order

* Caroline Norbury OBE, Chief Executive Officer, QQ 1–12
Creative UK
* Annette Mees: Artistic Director, Audience Labs, and
Visiting Senior Research Fellow, Culture and Creative
Industries, King’s College London
** Tonya Nelson, London Area Director, Arts Council
England
* Ed Shedd: Partner, Technology, Media and
Telecommunications, Deloitte
** Paul Fleming, General Secretary, Equity QQ 13–17
** Dan Conway, Chief Executive Officer, Publishers
Association
* Dr Andres Guadamuz, Reader in Intellectual Property
Law, University of Sussex
* Aidan Meller, Director, Ai-Da ROBOT QQ 18–29
* Ai-Da
* Dr Jo Twist OBE, Chief Executive Officer, UK QQ 30–39
Interactive Entertainment (Ukie)
* Catherine Allen, Co-founder and Chief Executive
Officer, Limina Immersive
* Verity McIntosh, Senior Lecturer in Extended and
Virtual Realities at University of the West of England
(UWE) Bristol
* Chance Coughenour, Head of Preservation, Google QQ 40–45
Arts & Culture
** Rishi Coupland, Head of Research and Insight, British
Film Institute
* Professor Melissa Terras, Professor of Digital Cultural
Heritage, University of Edinburgh
* Professor Giorgio Fazio, Professor of Macroeconomics, QQ 46–55
University of Newcastle
* Robert Husband, Partner, Moore Kingston Smith
* Dr Nicola Searle, Digital Economy Fellow and

Senior Lecturer, Institute for Cultural and Creative
Entrepreneurship, Goldsmiths, University of London
* Chris Michaels, Director of Digital, Communications QQ 56–60
and Technology, National Gallery
* Adam Dickinson, founding partner and Development
Director, Rezzil
* Tom Box, Managing Director and Co-Founder, Blue
Zoo Animation
** Lesley Giles, Director, Work Advance QQ 61–72
* Professor Steven Spier, Vice-Chancellor, Kingston
University
* Dr Lisa Morrison Coulthard, Research Director,
National Foundation for Educational Research
* Dr Molly Morgan Jones, Director of Policy, British QQ 73–80
Academy
* Robert West, Head of Education and Skills,
Confederation of British Industry (CBI)
** Seetha Kumar, Chief Executive Officer, ScreenSkills
** Dinah Caine CBE, Chair, Camden STEAM QQ 81–89
Commission
* Eliza Easton, Deputy Director Policy and Evidence
Centre, Nesta
* Olly Newton, Executive Director, Edge Foundation
** Dr Paul Thompson, Chair - Specialists Institutions’ QQ 90–102
Forum, Universities UK and Vice-Chancellor, Royal
College of Art
** Corrienne Peasgood OBE, President, Association of
Colleges
** Alun Francis OBE, Principal and Chief Executive
Officer, Oldham College
* Simon Field, Director, Skills Policy
** Professor James Bennett, Director, StoryFutures QQ 103–110
* Councillor Phil Seeva, Culture, Tourism and Sport
Board, Local Government Association
* Paul Owens, Co-founder and Director, BOP
Consulting
* Carolyn Warren, Director-General of Arts Granting Q 111–118
Programs, Canada Council for the Arts
* Professor Hye-Kyung Lee, Professor of Cultural Policy,
King’s College London
** Dr Martin Smith, Managing Director, West Bridge
Consulting
** Dr Darren Henley OBE, Chief Executive Officer, Arts Q 119–130

Council England
** Professor Christopher Smith, Executive Chair, Arts
and Humanities Research Council, UK Research and
Innovation
* Sir Peter Bazalgette, Industry Co-Chair, Creative
Industries Council
* Rt Hon Robert Halfon MP, Minister of State (Minister Q 131–142
for Skills, Apprenticeships and Higher Education), HM
Government - Department for Education
** Julia Lopez MP, Minister of State for Media, Data, and
Digital Infrastructure, HM Government - Department
for Digital, Culture, Media and Sport
* Kevin Hollinrake MP, Parliamentary Under Secretary
of State, HM Government - Department for Business,
Energy and Industrial Strategy
Alphabetical list of all witnesses
a-n The Artists Information Company CRF0050
Advertising Association CRF0013
Adobe CRF0055
* Ai-Da (QQ 18–29)
** Arts Council England (QQ 1–12, Q 119–130) CRF0043
Arts University Plymouth CRF0028
Arup CRF0047
The Association for Lighting and Production Design CRF0048
AudioUK CRF0075
** Corrienne Peasgood OBE, President, Association of CRF0074
Colleges (QQ 90–102)
Association of Illustrators CRF0039
Association of Photographers CRF0052
Mx Lorenzo Belenguer CRF0002
Dr Emine Beyza Satoglu CRF0018
* Blue Zoo Animation (QQ 56–60)
* BOP Consulting (QQ 103–110)
* British Academy (QQ 73–80)
British Entertainment Industry Radio Group CRF0017
** British Film Institute (QQ 40–45) CRF0051
British Screen Forum CRF0060
** Camden STEAM Commission (QQ 81–89) CRF0063
CRF0067
* Canada Council for the Arts (Q 111–118)

* CBI (QQ 73–80)
Professor Jean Chalaby CRF0006
Professor Andrew Chitty CRF0064
Contemporary Visual Arts Network (CVAN) England CRF0034
Crafts Council CRF0005
* Creative Industries Council (Q 119–130)
Creative Industries Policy and Evidence Centre, led by CRF0024
Nesta
Creative Informatics and the Edinburgh Futures CRF0035
Institute (University of Edinburgh)
* Creative UK (Q 1–12)
Creators’ Rights Alliance CRF0014
DACS CRF0042
CRF0068
Design Council CRF0072
Adam Dickinson CRF0065
Professor Jun Du (joint submission) CRF0018
* Edge Foundation (QQ 81–89)
** Equity (QQ 13–17) CRF0010
Joanne Evans (joint submission) CRF0011
* Professor Giorgio Fazio (QQ 46–55)
** Alun Francis OBE, Principal and Chief Executive CRF0070
Officer, Oldham College (QQ 90–102)
Professor Gabriella Giannachi (joint submission) CRF0011
* Google Arts & Culture (QQ 40–45)
Greater London Authority CRF0020
* Dr Andres Guadamuz (QQ 13–17)
Professor Tracy Harwood CRF0001
* HM Government—Department for Business, Energy
and Industrial Strategy (QQ 131–142)
** HM Government—Department for Digital, Culture, CRF0058
Media and Sport (QQ 131–142) CRF0073
* HM Government—Department for Education
(QQ 131–142)
John Howkins CRF0062
* Robert Husband (QQ 46–55)
Incorporated Society of Musicians CRF0012
Institute for Creative and Cultural Entrepreneurship, CRF0016

Goldsmiths, University of London
The Ivors Academy of Music Creators CRF0038
Dr Pietari Kaapa CRF0009
* Professor Hye-Kyung Lee (Q 111–118)
Dr Dominic Lees CRF0008
Professor Feng Li CRF0019
* Limina Immersive (QQ 30–39)
* Local Government Association (QQ 103–110)
Dr Lucy McFadzean (joint submission) CRF0011
* Verity McIntosh (QQ 30–39)
* Annette Mees (QQ 1–12) CRF0071
* Aidan Meller (QQ 18–29)
Minderoo Centre for Technology and Democracy, CRF0007
University of Cambridge CRF0026
Motion Picture Association CRF0057
Music Venue Trust CRF0021
National Council for the Training of Journalists CRF0053
* National Foundation for Educational Research (QQ
61–72)
* National Gallery (QQ 56–60)
National Museum Directors’ Council CRF0040
The National Theatre CRF0033
* Nesta (QQ 81–89)
News Media Association CRF0015
Simon Oldfield CRF0046
Pact CRF0029
Patreon Inc CRF0022
PRS for Music CRF0054
** Publishers Association (QQ 13–17) CRF0045
Publishers’ Licensing Services CRF0030
* Rezzil (QQ 56–60)
** Royal College of Art (QQ 90–102) CRF0041
** ScreenSkills (QQ 73–80) CRF0004
CRF0059
* Dr Nicola Searle (QQ 46–55)
* Ed Shedd (QQ 1–12)
* Skills Policy (QQ 90–102)
** Dr Martin Smith (Q 111–118) CRF0003

CRF0061
CRF0069
The Society of Authors CRF0031
* Professor Steven Spier (QQ 61–72)
** StoryFutures (QQ 103–110) CRF0036
Teledwyr Annibynnol Cymru (TAC) CRF0049
* Professor Melissa Terras (QQ 40–45)
University of Arts London CRF0044
UK Interactive Entertainment CRF0025
UK Music CRF0037
** UK Research & Innovation CRF0056
* Ukie (QQ 30–39)
Universities UK (QQ 90–102)
White Light Ltd CRF0032
** Work Advance (QQ 61–72) CRF0066
Writers’ Guild of Great Britain CRF0027
XR Stories and Screen Industries Growth Network, CRF0023
University of York
Appendix 3: CALL FOR EVIDENCE
A creative future
The Communications and Digital Committee is launching an inquiry into the
future of the UK’s creative industries. The Committee invites written contributions
by Friday 2 September 2022. The Committee expects to hold oral evidence
sessions from early September.
Background
There are major changes on the horizon for the UK’s creative industries. These
are shaped by a range of national and global trends. This inquiry will examine
some of the most significant changes expected over the next 5-10 years arising
from the effects of new technologies, and explore what is needed from the skills
and talent pipeline to ensure the UK’s creative industries can thrive in this fast-
changing world. It will also consider the role of innovation and organisational
adaptation.
Technological development is just one of many forces driving change in the sector,
but its impacts are likely to be particularly significant. Creative content production
is likely to be affected by new technologies such as machine learning and artificial
intelligence, which could supplement, enhance or in some cases replace human
creative work. Rapid advances have already taken place in some areas, from the
creation of art and music through to narration and voiceovers.
Audience engagement is another area that is becoming more digitalised.
Developments in immersive experiences such as augmented or virtual reality look
set to offer new ways of creating and delivering cultural content, from performances
to painting. Organisations are increasingly turning to digital services to attract
and retain audiences and customers.
Some business models may change significantly. The impact of streaming on the
music and screen industries is already well known, even if its long-term effects are
not fully understood. New forms of creating, distributing and paying for creative
content and services may affect business models across the sector.
As these trends develop there will be positives and negatives, opportunities
and risks. They are likely to affect large institutions, small and medium sized
organisations, as well as the freelancers that constitute a major part of the creative
industries workforce. They will put further pressure on the need for a system that
delivers the right skillsets and talent pipeline for the jobs of the future.
Before the pandemic, the UK’s creative industries were growing more than five
times faster313 than the national economy, generating £111.7 billion for the UK in
2018. Provisional data314 indicate a positive trend in their economic contribution
in 2021, bouncing back from the setbacks during the first year of the pandemic. As
the creative industries face new challenges over the next 5–10 years, policymakers
and industry will need to ensure the right education, innovation and organisational
adaptation frameworks are in place to take advantage of the changes ahead.
313 Department for Digital, Culture, Media & Sport, ‘UK’s Creative Industries contributes almost £13
million to the UK economy every hour’ (6 February 2020): https://www.gov.uk/government/news/
uks-creative-industries-contributes-almost-13-million-to-the-uk-economy-every-hour [accessed
1 December 2022]
314 Creative Industries Council, ‘Positive Trend In Economic Recovery Of UK Creative Industries From
Pandemic’ (4 May 2022): https://www.thecreativeindustries.co.uk/facts-figures/positive-trend-in-
gva-of-uk-creative-industries-from-pandemic [accessed 1 December 2022]
Inquiry questions
1. Which areas of the creative industries face the greatest potential for disruption
and change in the next 5–10 years, and what impact could this have? a)
What changes are expected in the way creative/cultural content is produced;
the way audiences are engaged (for example through digital or immersive
experiences); and the way business models operate?
2. What skills will be required to meet these emerging opportunities and
challenges?
3. What actions are needed from the Government and local authorities to
ensure there is an appropriate talent pipeline equipped with these skills? a)
How can this be sufficiently flexible to take account of the pace of change in
the sector?
4. What actions are needed from industry to support the talent pipeline
development? a) What actions are needed from organisations in the creative
industries to prepare for and accommodate the requirements of the future
workforce?
5. What role do innovation and research & development play in addressing the
future challenges facing the creative industries? a)What actions are needed
from the Government, funding bodies and sector organisations to support
innovation, and research & development?
6. How effective are the Government’s existing strategies at supporting the
creative industries to meet the challenges and opportunities ahead?
7. What lessons can the UK’s creative industries learn from other countries,
and other sectors?
Further notes
There are many ways of categorising and defining the creative sector. The
Government refers to the ‘creative industries’, which it has defined315 as “those
industries which have their origin in individual creativity, skill and talent and
which have a potential for wealth and job creation through the generation and
exploitation of intellectual property”. UNESCO has referred to the ‘creative and
cultural industries’, which it has defined316 as activities “whose principal purpose
is production or reproduction, promotion, distribution or commercialisation of
goods, services and activities of a cultural, artistic or heritage-related nature”. Our
inquiry will focus principally on a sub-set of areas including:
1. Music, performing and visual arts
2. Museums and galleries
3. Publishing
4. Gaming, film, TV, video, photography
315 Department for Culture Media and Sport, Creative Industries Economic Estimates (January 2016),
p 3: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/
f ile/523024/Creative_Industries_ Economic_ Estimates_ Januar y_ 2016_Updated_ 201605.pdf
316 EY, Cultural times (December 2015): https://en.unesco.org/creativity/sites/creativity/files/cultural_
times._the_first_global_map_of_cultural_and_creative_industries.pdf [accessed 11 January 2023]
5. (Digital and design services which provide a core input across the areas
above)
The committee encourages interested parties to follow the progress of the inquiry
on Twitter @LordsCommsCom and at: https://committees.parliament.uk/
work/6881/a-creative-future/
Appendix 4: NOTE OF VISIT TO STORYFUTURES
Visit to StoryFutures
This Committee undertook a visit to StoryFutures, one of the clusters in the
Creative Industries Clusters programme, to inform this report.
On 14 November the Committee visited StoryFutures, which is based at Royal
Holloway, University of London. In attendance were Baroness Stowell, Baroness
Rebuck, Baroness Bull, Lord Young, and Lord Lipsey.
The purpose was to engage with one of the Clusters to understand better its work
and impact, and to explore key issues of the inquiry including the impact of new
technologies, opportunities and challenges for SMEs, research and development,
and skills.
The Committee received briefings and demonstrations from academics and
industry practitioners who were part of the Clusters programme. This included
demonstrations of the StoryTrails experience, the virtual reality film Laika,
the augmented reality experience The Keeper of Paintings and Valkyrie haptic
technologies. The Committee also heard from students at the university.
The visit involved a presentation by Professor Andrew Chitty, Challenge Director
for the Creative Industries Clusters Programme, and a plenary question and
answer session.
The Committee heard that the programme’s value lay in convening universities
and businesses to collaborate on research and development, skills training, business
guidance and support in bringing ideas to market. Businesses stated that having
the support of universities provided a degree of reassurance to investors that made
them a stronger proposition for investment. Academics noted that the Clusters
programme created new incentives for applied research relevant to commercial
applications that did not otherwise exist. With regard to overall evaluation of the
Creative Industries Clusters Programme, the Committee heard that the level of
private co-investment had significantly exceeded the programme’s original targets.
Appendix 5: GLOSSARY OF KEY TERMS
AHRC The Arts and Humanities Research Council

AI Artificial intelligence
CreaTech The intersection of the creative and technology sectors
CPTPP The Comprehensive and Progressive Agreement for Trans-Pacific
Partnership
EBacc The English Baccalaureate
IP Intellectual Property
IPO The Intellectual Property Office
ISCF The Industrial Strategy Challenge Fund
LLE Lifelong Loan Entitlement
R&D Research and development
SMEs Small and medium enterprises
STEAM Science, Technology, Engineering, Arts and Maths
UKRI UK Research and Innovation
VR Virtual reality
XR Extended reality

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HOUSE OF LORDS

Communications and Digital Committee

2nd Report of Session 2022–23

At risk: our creative

Ordered to be printed 10 January 2023 and published 17 January 2023

Published by the Authority of the House of Lords

Evidence is published online at https://committees.parliament.uk/

Q in footnotes refers to a question in oral evidence.

Creative sector organisations receiving public funding also face a challenging

• Recognise our strengths: The creative industries are an economic

careers in the sector. The Department should further address barriers

Terms and definitions

1 DCMS, ‘Sector Estimates Methodology’ (2021): https://www.gov.uk/government/publications/

The importance of creative industries

Figure 1: Top ten exporters of creative services worldwide in 2020

United States 206

Figure 2: Top ten exporters of creative goods worldwide in 2020

8. We heard that the creative sector is well suited to delivering on Government

Rising competition and the risk of complacency

27 Written evidence from Ukie (CRF0025)

present major barriers to growth in multiple subsectors.41 In emerging fields

The need for change

innovation would be “a defining focus of my government”, describing it as

Chapter 2: A DIGITAL FUTURE

Text and data mining

freelancers to major businesses.66 IP rules protect around £63 billion worth

66 Freelance UK, ‘Intellectual Property: What freelancers need to know’: https://www.freelanceuk.com/

Securing performers’ rights

create or modify a digital likeness of a performer’s image or voice. These

77 Written evidence from Equity (CRF0010)

Intellectual property and international trade

• inadequate requirements for signatory nations to prevent piracy and IP

• proposed reductions to the time span for UK rights holders to benefit

• insufficient provision of artist resale rights, which would provide

90 Written evidence submitted to the International Agreements Committee inquiry on Intellectual

gallery director and modern art specialist, anticipated significant impacts to

109 Written evidence from Equity (CRF0010)

Chapter 3: IMPROVING THE BUSINESS ENVIRONMENT

Creative Industries Clusters Programme

113 Businesses which employ fewer than 10 staff.

Box 1: UKRI’s Creative Industries Clusters Programme

The Creative Industries Clusters Programme was launched in 2018 with

• delivered almost £4 in co-investment for every £1 of UKRI funding;

• created or safeguarded over 4,000 jobs;

• supported 227 new spinouts and start-ups;

• funded 700 industry-led R&D projects/businesses;

• supported 558 new products, services and experiences; and

• trained 3,500 industry professionals and academics.128

storytelling at the heart of next generation immersive technologies”, reflecting

• a £63.6 million investment in Convergent Screen Technologies And

• a £30 million Creative Catalyst programme;

• a £15 million circular fashion programme;

• a £22 million investment in Cardiff media organisations; and

• continued funding of the Creative Industries Policy and Evidence

130 StoryFutures, ‘StoryFutures and StoryFutures Academy’: https://www.storyfutures.com/about

allocating funding from AHRC’s infrastructure programme “to enable staff

Tax relief and innovation

Box 2: Definitions of R&D eligible for tax relief

The OECD defines R&D as “Creative and systematic work undertaken in