The impact of folk festivals: discussion of the report published by the Association of Festival Organisers in March 2004.

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Comments on my analysis would be welcome. email


The impact of folk festivals on the local economy of various regions in the UK would be an interesting topic for detailed analysis. Different types of festivals would have different impacts - one important variable would be whether most attendees stayed on campsites out of town or used local B&B and other accommodation. Also, folk festivals vary considerably in their size and requirement for policing - some attracting more 'potentially troublesome' people than others.

A report entitled "The impact of folk festivals" was published in March 2004 by the Association of Festival Organisers. It is downloadable as a pdf document from their website and at first sight is impressive. It is colourful and easy to read. It is stated to be based on a major independent research study undertaken by Morris Hargreaves McIntyre. Contributors included the Musicians' Union, the BBC, Arts Council England, the National Association of Local Government Arts Officers and Visit Britain. In fact, MHM is a small 'arts management' consultancy that undertakes 'research' via telephone interview and through focus groups. "Research positions" are advertised on its website as being available - paying 5.50 per hour! The overall project was funded by the Arts Council of England's New Audiences Programme. The New Audiences grant was 61,117 for this project out of a total budget for the years 1998-2003 of 20 million.

The report also has the perceived authority of having been produced with the co-operation of some of the best known names in the folk world. It contains a good discussion of the problems facing some folk festivals, and of the need to share knowledge and experiences so as to avoid duplication of effort - a message that should be taken to heart by the environmental movement also (just a personal gripe!).

Addressing regulatory requirements is rightly highlighted as a major concern:  when in the UK we have reached the position of egg and spoon races at village fetes having to be cancelled because of concern over legal liability then the time has surely come to protest. Please fax your MP using this website and ask him/her what he/she is proposing to do to restore the rule of common sense. Please mention the 'seered' website.

Unfortunately, the report is so light on substance as to render it almost useless as a basis for serious discussion on the economic impact of festivals. The 'analysis' presented is almost wholly lacking in credibility - it amalgamates data from festivals of different sizes and types and fails to consider in any depth the central issue of how much of the money spent by attendees actually finds its way into the local economy of host towns and villages. It is precisely this factor which has been at the heart of so much debate in Sidmouth for over a decade.

Detailed analysis.

The report is based on short questionnaires with 4294 festival goers at six sites followed by completion of 450 'in depth' questionnaires. Consultees read like a who's who of the arts and tourism world. The finances of 31 festivals were analysed and it is estimated there are over 350 held in the UK each year. The reason for the study is given thus:

"Despite much anecdotal evidence about the impact festivals make on a region's economy, there has never been any national research done into folk festivals and the effect they have on economic development, regeneration and cultural tourism. It was in this context, and against a backdrop of the threat which foot and mouth brought to parts of the sector, that the Arts Council England developed this project with the Association of Festival Organisers." - Alan James. Head of Contemporary Music, Arts Council England.

Furthermore it is claimed that

"folk festivals are highly effective at meeting economic, social and artistic objectives and produce an excellent return on the public funding invested in them"

The overall statistics within the report may well be correct. It is the conclusions drawn from them that are open to question.

We are told that:

There are over 350 festivals each year in the UK attracting over 350,000 attendances from 106,000 people each of whom attends an average of 3.3 festivals per year. Total spending is put at 82 million, with a 'primary spend' of 77 million - an average of 220 per attendance or 726 per person. The difference between the total and 'primary' spend is the money spent by festivals themselves - about 5 million. Out of the 350,000 attendances, 315,000 are classed as 'tourists' rather than people attending their local festival.

It is claimed:

"The true economic impact of folk festivals is likely to be far greater than just the 77 million primary spend"

"festival attenders (attendees?!) spend most of their money locally in small enterprises. Because of this, the money stays, and re-circulates, within the local economy".

No data is given to substantiate these claims.

Even in Sidmouth with its many small shops it is unlikely that most of the money spent is retained in the local economy. Moreover, it is further claimed that money spent within a town enables local people to spend the money yet again locally (presumably this constitutes economic growth without end!) and known as the 'multiplier effect'. The basis for this is apparently explained in the LM3 measure of the New Economics Foundation - more of which some other time, perhaps. If 100 enters a region the gain to the region could be argued to remain at 100 notwithstanding any subsequent local redistribution.

Figures are given for total visitor spend at festivals as follows: (in million)

Tickets: 14.69, travel: 12.97, accommodation 16.66, food and drink 16.91, other purchases 15.75 , a total of 77 million. Spending by festivals themselves (howsoever defined) is given as 5.21 million yielding the gross total of 82.19 million.

Data for accommodation and food and drink are also given in terms of per person per day/night at 10.13 and 8.48 respectively.

Some conclusions may be drawn from these few numbers. Money spent on tickets and travel does not (by and large) enter the local economy of a host town. Revenue from tickets goes to the festival organisers to pay for infrastructure, hire of equipment, etc and to pay performers and musicians. Travel is largely a matter of petrol or rail fares. Accommodation costs of 16.66 million are apparently divided into 8.34 million in hotels and guest houses (up to 300,000 nights away from home at an average cost of 26.32) with the balance on camp sites - many run by festival organisers but with some payment to local landowners. Out of an estimated total of 1.3 million 'nights away from home' one million are on camp sites or with friends and relatives at an average cost that appears to be 16.66-8.34= 8.32 million or 8.32 per person per night.

None of these figures appear unreasonable but little of the money may end up 'in the local economy' and (thereby and perhaps) be worthy of some measure of local support. Maybe half of the accommodation costs in hotels and guest houses would be spent in small local establishments and benefit 'the local economy', the other half benefiting hotel owners who live out of town. Food and drink and other purchases account for 33 million - nearly half the total of 77 million. Indeed, food, drink and other purchases are by far the largest expenditure that might qualify as 'contributing to the local economy'. The proportion doing so may be very 'festival specific'.

Overall public funding of festivals is given at 2.11million or (divided by 350,000 attendances) equating to an average subsidy per attendance of 6. Over 70% of this comes from local authorities in the guise of economic development/tourism and arts grants - some 4.30 per attendance. Analysed in this way, it is difficult to see why there is so much concern about withdrawal of local council support - would 4.30 really make any difference to whether someone attended a festival if it had to be included on the ticket price? Obviously some festivals will receive (and may need) more support than others - and including 'hidden' support such as street cleaning, policing, rubbish removal etc. Discussion of the level of 'necessary' subsidy to festivals would be meaningful only if 'raw' data was to be made available, enabling subsidy by size and type of festival to be analysed. In fact, a lot of data is available because annual accounts are published through Companies House.

It is further claimed that the overall 'return' on public sector investment in festivals is a staggering 39 per 1 - the report appears to achieve this miracle of economics by dividing the total gross spend of 82 million by the total subsidy of 2.11 million (82/2.11 = 38.9). This is creative accounting at its most enabling - the report is suggesting that spend by visitors on petrol, train fares, indeed on everything, is included in the return on investment to the region. Circular arguments and self-reinforcing subsidies have to end somewhere!

In all, the report offers little by way of substance in data analysis. It could be interpreted as suggesting that the well-run folk festivals need no support at all and the less profitable ones need to 'get their act together'. With an average per capita spend of 220 per festival, withdrawal of the average local council subsidy of 4.30 (including only 2.50 from economic development and tourism budgets) could - again on average - easily be accommodated. In truth, some ticket prices may be heavily subsidised and for the overall sector the 'hidden' subsidies may be larger. There are good grounds for arguing that no attempt should be made to recover these - for example by charging festivals for street cleaning, policing or rubbish removal from public receptacles. If the experience of small village events is a guide, the principal impediment to future viability of festivals may be an increasing regulatory and insurance burden.

There is obviously scope for more robust analysis. In particular, the cherished notion that folk festivals should even in part be subsidised at a local level because of the economic benefits they bring a host town may need to give way to funding at a national level, perhaps by the Arts Council. In particular, events such as the Sidmouth International Festival may in reality contribute little net gain to the local economy. Indeed, they may incur a substantial net 'hidden' subsidy in addition to any overt grant aid and which has to be found from local taxation. This and other similar festivals may properly need to be viewed in future as national or even international events, rather than as local ones deserving of local funding. It is here important to recognise that the structure of the host town or village in terms of who owns the shops and pubs may be just as important as the siting and size of the festival in determining the true 'net impact on the local economy' - defined perhaps as the net gain or loss to the local population who pay local taxes.

and finally,

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What should also be of public concern is the number of people 'employed' in quangos and local authorities, and in the mediocre 'consultancy' firms they may utilise. Often, their only or principal output is little more substantial than glossy reports containing largely meaningless verbiage. Most of these reports add precisely nothing to local or national wellbeing. They are a waste of paper and a drain on public finances. Many seem to be produced merely to satisfy an executive requirement for tangible evidence that 'consultation' has taken place.


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