‘Festival organisers are seen as cash cows’

Beware of those wanting a slice of your ‘cake,’ baked with your hard work and success, says Steve Heap, general secretary of the Association of Festival Organisers (AFO).

Authority see festival organisers as cash cows. All through the deep recession period grants and sponsors disappeared like melting snow. Now there is a chance that the festival scene has turned round and new festivals are popping up each year. Well established events are doing well, attracting good custom and hoping for grants and sponsors.

Business Rates

Competition is hot so organisers have to work harder, be more creative and imaginative. All of the hard graft that has in the last couple of years led to success, has attracted attention. Are we becoming cash cows? We have immense support from people such as Business Visits and Events Partnership, the Events Industry Forum, AFO, AIF and many other organisations. However, authority in various disguises are looking to the success of festivals to bail out their financial difficulties - the most recent being the Valuation Office Agency, which is now targeting over 800 green field site festivals and claiming business rates, in some cases back dating five years. For some festivals this creates a bill of over £20,000. AFO and others are busily fighting this off.

Special Police Services

With major cuts in police budgets, various constabularies are looking for funds and in some cases are inflicting their requirements on festivals and events and then forwarding a large bill; thousands of pounds for police services that were never requested in the first place and when they are requested, are being charged at exorbitant rates. This and the approach from the Valuation Office just simply don’t stack up. If we end up paying business rates, surely that covers police costs – or am I missing something? We then have to keep an eye on what we call “parachute artists” and cowboys out there thinking the festival scene is making money. They think “we can do that too”, getting our industry a bad name and creating further competition from an amateur source. HMRC in the guise of the VAT man is constantly scrutinising our work to make sure that the industry is properly taxed. Handling VAT where appropriate, if your event is VAT registered, you can bet your life you will be collecting on behalf of HMRC.

PRS

And finally back on the block (we have been here before), we have PRS, the Performing Right Society, currently charging 3% of box office take, plus VAT for a licence to play the music written and published by others. In principle the AFO supports this purpose and has asked that PRS ring fence licensing income to ensure it goes back to the people who created the music and published it in the first place. However, they have now put the 3% under review which, if increased, puts further pressure on festivals’ budgets to make the grade. Undoubtedly this pressure to increase the 3%, for that’s what it will be (review in disguise), has no doubt come from its membership who are almost certainly suffering reduced income from the slowing down of the record sales industry.

AFO, however, would argue that the percentage, as invented thousands of years ago, is exactly what it is. As festivals increase their ticket rates by at least inflation and in many cases more than inflation, 3% gives a higher revenue to PRS for distribution to its members. Therefore their wages from this source have been increasing at greater than inflation for many years whilst everyone else has been on, at the very best, standstill. AFO and others will meet with PRS and enter into discussions for a freezing of 3% for festivals and events and a ringfencing of the income to ensure it is returned to its rightful owners, the writers and publishers.

Cash cows?

So is the hard graft and success of festival organisers now seen as a cash cow? I think it probably is. Beware of those wanting a slice of your cake baked with your hard work, and success in 2015.