Many creative companies are on the verge of collapse and require an urgent bailout, the Creative Industries Federation has warned
Data published by the advocacy and lobbying group, based on a survey of more than 2,000 companies and individuals, shows that one in seven creative businesses will struggle to operate beyond the next four weeks on their existing reserves.
It comes as an RIBA survey revealed from its own research that nearly half of architects had already suffered a drop in their personal income with more than a third (37 per cent) reporting projects being cancelled.
The creative industries survey says almost two-thirds of creative organisations predict a decrease in annual turnover of more than 50 per cent by the end of the year, while 42 per cent said their income had completely dried up since the Covid-19 outbreak.
‘The crux of it is that creative businesses need money now, and they can’t wait another month,’ said federation chief executive Caroline Norbury.
‘Through no fault of their own, many creative industries businesses are on the brink of collapse – with all the economic knock-on effects and hardship that entails.’
She added: ‘Government must act rapidly to get grants to where they are needed most.’
In a letter to the government, the federation said the Coronavirus Business Interruption Loan Scheme (CBILS) was not enough to keep businesses alive.
‘Despite welcome changes to the Coronavirus Business Interruption Loan Scheme (CBILS), we know from our previous experience with the Enterprise Finance Guarantee – on which CBILS is based – that many creative businesses will still struggle to access these loans and for those who do, this finance will come too late,’ the letter said.
The federation’s survey revealed that 45 per cent of creative organisations do not understand the CBILS.
The RIBA’s own survey of 1,000 people showed, meanwhile, that 45 per cent of architects had suffered a drop in their personal income.
It also found that 23 per cent of people had seen their mental health get worse as a result of the coronavirus pandemic.
RIBA chief executive Alan Vallance, said: ‘The findings of [our] survey show how that Covid-19 is having a severe impact on architects, professionally and personally.
’For many architects, their work is more than a way to earn a living, and to see decades of hard work threatened by circumstances none of us can have foreseen is a disaster.’
Click here to read the AJ’s series of practical ‘how-to’ guides looking at the financial aid available to architectural practices to help them through the current crisis.