Employment and Economic Impact Assessment of Covid-19 on the Arts Sector in Ireland - 30 March 2021
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Employment and Economic Impact Assessment of Covid-19 on the Arts Sector in Ireland Reliance restricted Final Report 30 March 2021
“ The Arts sector has been
impacted more than any other
sector by Covid-19 in 2020.
What is the scale of this impact?
Reliance Restricted
Deirdre Behan
The Arts Council
70 Merrion Square
Dublin 2
D02 NY52
Employment and economic impact assessment of Covid-19 on the Arts sector in Ireland 30 March 2021
Dear Deirdre,
Ernst & Young
Business Advisory Services In accordance with the terms of our framework agreement (the ‘Agreement’) dated 25 May 2020 and our engagement agreement
Harcourt Centre dated 10 March 2021, we have assisted the Arts Council in a study of the economic impacts of COVID-19 on the Irish Arts sector.
Harcourt Street Our role is to provide you with our analysis and findings. We have not performed any management functions or made any
Dublin 2 management decisions.
Ireland
ey.com Limitations of Scope
We have not, except to such extent as you have requested and we have agreed to in writing, sought to verify the accuracy of the
Simon MacAllister data, information and explanations provided by yourselves, and you are solely responsible for this data, information and
Partner explanations. We have therefore relied on the information provided by you to be accurate and complete in all material respects.
Strategy and Transactions This report has been provided to you for the above Purpose only and should not be used or relied upon for any other purpose, nor
T +353 1 221 2611 should it be disclosed to, or discussed with, any other party without our prior consent in writing.
M +353 86 8304580
E simon.macallister@ie.ey.com
Use and distribution of this report
Yannick Cabrol This report has been prepared for the purpose set out in the Agreement and may only be used and disclosed, quoted or referred
Assistant Director to on the basis set out therein. Ernst & Young only accepts responsibility to the addressees of this letter on the basis of the
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Strategy and Transactions report to parties other than yourselves. If other parties choose to rely in any way on the contents of this report, they do so
T +353 1 221 1199
entirely at their own risk.
M +353 87 3448862
E yannick.cabrol@ie.ey.com We appreciate having been given the opportunity to provide EY’s valuation services to The Arts Council. If you have any questions
or require additional information, please contact me at +353 86 830 4580.
Yours sincerely,
Simon MacAllister, Partner
D Buckley, D Dennis, J Fenton, M Gageby, J Hannigan, S MacAllister, S MacSweeney, B McCarthy, D McSwiney, J Maher, A Meagher, I O’Brien, R O’Connor, F O’Dea, E O’Reilly, M Rooney, C Ryan, P Traynor, A Walsh, R Walsh.
The Irish firm Ernst & Young is a member practice of Ernst & Young Global Limited. It is authorised by the Institute of Chartered Accountants in Ireland to carry on investment business in the Republic of Ireland.
Page 3 Employment and Economic Impact Assessment of Covid-19 on the Arts Sector in Ireland, March 2021The Irish Arts sector would have lost 4 jobs out of 10 without government support in 2020 as a result of
COVID-19
-54% change in 15% of pre-
GDP of the Arts pandemic jobs
sector have been lost
The Arts
sector was one
of the worst
hit by COVID-
19 in Ireland
and Europe
26% of Arts -90% reduction in
jobs depending turnover in
on government performing arts in
support Europe
Based on CSO data, we estimated that the core Arts sector employed 10,300 in 2019 corresponding to arts and entertainment activities.
Page 4 Employment and Economic Impact Assessment of Covid-19 on the Arts Sector in Ireland, March 2021Jobs in the arts sector have been significantly disrupted, and were already among the lowest paid
Covid-19 has caused major disruption to the entire labour market, however some sectors have fared better than others. While hundreds of thousands of people
were in receipt of wage supports such as Pandemic Unemployment Payment (PUP) and Employee Wage Subsidy Scheme (EWSS) for a significant portion of the
year, total income tax receipts fell by just 1% in 2020. This can be attributed to the fact that the jobs which were impacted were primarily in lower paid sectors,
including the Arts. EY estimates that approximately 57% of jobs in the arts sector were disrupted in 2020.
Jobs disrupted by COVID-19 in Ireland in 2020
by sector and average weekly earnings
LOWER PAID JOBS x HIGH DISRUPTION
100%
80% Construction
Accommodation and
% of jobs disrupted
food Retail Admin services
60% Arts and
entertainment
Transport Professional
40% and storage services
Other… Industry Finance
20% ICT
Education Health
Public Admin
0%
300 400 500 600 700 800 900 1,000 1,100 1,200 1,300
Average weekly earnings (€)
Note: size of circle indicates the number of employees in the sector in Q4 2019
Source: CSO, Department of Employment and Social Protection, EY Analysis 2021.
Page 5 Employment and Economic Impact Assessment of Covid-19 on the Arts Sector in Ireland, March 2021Activity in the arts and entertainment sector decreased by more than half in 2020, more than any other
sector in the economy
The arts, entertainment and recreation sector has faced a significant decline in economic activity as a result of Covid-19. In 2020, the sector contracted by a
staggering 54.4% compared to 2019. This is significantly higher than any other industry, and in stark contrast to the 3.4% growth which was recorded in the
economy as a whole. This severe decline can be attributed to the fact that while sectors such as retail and hospitality were also forced to shut down for
extended periods, they were in a position to reopen upon the easing of restrictions, which was not possible for the Arts sector.
Gross Domestic Product by sector, 2020 (annual % change)
Industry 15.2%
ICT 14.3%
Gross Domestic Product 3.4%
Education and health
Financial and insurance
Agri, forestry and fishing
Real estate activities
-12.7% Construction
-15.5% Professional and admin
-16.7% Transport and hospitality
-54.4% Arts, entertainment, other
Source: CSO Quarterly National Accounts Q4 2020
Page 6 Employment and Economic Impact Assessment of Covid-19 on the Arts Sector in Ireland, March 2021At least 1 in 4 jobs in the Arts sector are reliant on government supports at present. Without it, 4 jobs out
of 10 could have been lost in 2020
A significant portion of jobs in the Arts sector are in a very precarious position at present, and it is likely that many of these jobs would be lost if government
supports were to come to a sudden end. We estimate that 15% of pre-pandemic Arts jobs were lost in 2020, and a further 26% of jobs are directly depending on
government support. We estimated that the core Arts sector was 10,300 corresponding to arts and entertainment activities. Data is only available at a sector
level (e.g. arts, entertainment and recreation). In this sector, 26% of jobs depend on government support (PUP and EWSS), so we can assume that 2,400 jobs in
the core Arts sector are relying on government support.
This estimate could be considered conservative given the over-representation of performing arts in our core sector which has been more impacted than other
creative industries (see overleaf for an analysis at a European level). However, this is counterbalanced by the fact that some organisations are Arts Council
funded and more resilient to a drop in attendance levels.
2,400 270 26%
+ =
Pandemic Employee Wage Of the pre-pandemic
Unemployment Subsidy Scheme Arts sector workforce
Payment (PUP) (EWSS) recipients in are reliant on
recipients in the arts the arts sector as at 28 government income
sector as at 9 March February supports at present
EY estimates that there 8,700 jobs in the Arts sector in 2020. Analysis of PUP figures in the total arts, entertainment and recreation
services sector.
Source: Department of Social Protection, Revenue.ie
Page 7 Employment and Economic Impact Assessment of Covid-19 on the Arts Sector in Ireland, March 2021The arts sectors across other European member states have been dealt a similarly harsh blow by Covid-19
Cultural and creative industries (CCIs) played a crucial role in the European economy pre-Covid, employing 7.6 million people and generating €643bn across
the 28 member states in 2019. While the CCIs encompass a broader range of sectors than are contained within the Arts Council remit in Ireland, it does provide
an indication as to how the sector fared across many locations.
EY estimates that CCIs have been the most adversely affected by Covid-19, each recording a 31% decline in turnover compared to 2019 levels. The chart
below displays the change in turnover among the subsectors of the CCIs. It would be beneficial to assess the weight and trends of each of these subsectors at
an Irish level, in order to identify synergies and opportunities.
Estimated change in turnover in the CCIs across 28 European member states, 2019-20 (%)
20%
0%
Music
Books
Radio
Advertising
Newspapers and
Visual arts
Audiovisual
Performing arts
Architecture
Video games
magazines
-20%
-40%
-60%
-80%
-100%
Source: Rebuilding Europe: The cultural and creative economy before and after the Covid-19 crisis, EY January 2021
Page 8 Employment and Economic Impact Assessment of Covid-19 on the Arts Sector in Ireland, March 2021Considering the Arts as part of the Creative industries will be key to launch an ambitious recovery plan
maximising the socio-economic potential of this sector
The damage which Covid-19 has caused the Arts sector in both Ireland and Europe is clear. Economic growth in the sector has plummeted, and artists and
workers in the Arts sector are facing employment insecurity more so than in other sectors. Difficulties are prolonged as cultural events need to be planned in
advance which is not possible at the moment given doubts about reopening dates.
Artists are often economically vulnerable, many of them are freelance and only working part-time in the Arts sector. A potential outcome of this crisis would be
to have a large decrease in the number of artists, unaccounted for by employment statistics. We can see that the decrease of employment (15%) is a lot lower
than the decrease of activity thanks to the support from public stakeholders, including the Arts Council and its Survive, Adapt and Renew Report.
A recovery plan also presents the opportunity to have a new approach to developing cohesive strategy in the sector, by investigating the trends and nuances
of each subsector and identifying opportunities and synergies. The transfer of skills from one creative industry to the other will be key to maximise productivity
and value-added of each job. By doing so, the sector will not only mitigate the impact of COVID-19, it will also be more resilient in the long-term. In terms of
international benchmarks, the French Arts sector receives substantial fiscal aid and as a result the economic value created by each job is 35% higher. We
suggest three pillars should be prioritised to support the recovery of CCIs and to create new job opportunities.
Near
Past
Finance Present
Empower Leverage
Future
1 2 3
Use the CCIs as an
Ensure a clear legal accelerator of
framework which social, societal and
Provision of public
guarantees income environmental
funding and
for creators and transitions in
promote private
return on Europe to support a
investment
investment for job-intensive and
businesses resilient economic
model
Source: Rebuilding Europe: The cultural and creative economy before and after the Covid-19 crisis, EY January 2021
Page 9 Employment and Economic Impact Assessment of Covid-19 on the Arts Sector in Ireland, March 2021EY | Assurance | Tax | Strategy and Transactions | Consulting About EY EY is a global leader in assurance, tax, strategy and transaction and consulting services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. Information about how EY collects and uses personal data and a description of the rights individuals have under data protection legislation are available via ey.com/privacy. For more information about our organisation, please visit ey.com. © 2021 Ernst & Young. Published in Ireland. All Rights Reserved. The Irish firm Ernst & Young is a member practice of Ernst & Young Global Limited. It is authorised by the Institute of Chartered Accountants in Ireland to carry on investment business in the Republic of Ireland. Ernst & Young, Harcourt Centre, Harcourt Street, Dublin 2, Ireland. Information in this publication is intended to provide only a general outline of the subjects covered. It should neither be regarded as comprehensive nor sufficient for making decisions, nor should it be used in place of professional advice. Ernst & Young accepts no responsibility for any loss arising from any action taken or not taken by anyone using this material . ey.com
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