DCMS will see its overall budget cut by 5% while its funding will be reduced by 20%. Both figures are far lower than the 40% the department was told to expect.
Speaking in the House of Commons today (25 November), Osborne highlighted the importance the creative industries, which include marketing and advertising, play. He said “deep cuts” to the sector would be a “false economy”.
“One of the best investments we can make as a nation is in our extraordinary arts, museums, heritage, media and sport.”
George Osborne, Chancellor
The industry broadly welcomed the Chancellor’s statement. The Creative Industries Federation pointed out that the abolition of national business rates (letting local councils set their own rates) should help small businesses including agencies. However it raised concerns over the potential impact of the apprenticeship levy on bigger creative companies.
John Kampfner, CEO, says: “It was heartening to hear the Chancellor state unequivocally both the value of arts and creative industries to UK society and the huge return that Government investment brings.
Boosting economic growth
There was more good news for marketers when Osborne announced a u-turn on planned tax credit cuts. He said an improvement in public finances meant the Government could “avoid” the cuts altogether.
The changes should mean a boost to consumer spending. Around three million low-income families were expected to lose an average of £1,000 a year under the plans.
Economic growth has also been revised up slightly, with GDP hitting 2.4% this year and in 2016 before rising to 2.5% in 2017 and settling around 2.3% in 2019 and 2020.
Deficit reduction was also high on the agenda in a move that Ian Twinn, ISBA’s director of public affairs, believes will have a positive impact on the ad industry.
He explains: “George Osborne’s Autumn Statement is very much geared towards economic growth and deficit reduction. Both of which are vital for the UK economy to continue on its upward trend and consumers having greater disposable income.
“This will directly benefit advertisers who will add to the economic activity by potentially increasing spending on advertising their goods and services in the new year. This in turn will benefit the economy with greater tax revenue and increased employment.”