According to new reports from the Association of Independent Festivals (AIF), 92% of its members say the debts incurred as a result of COVID-led cancellations could dissolve their businesses, with the majority (98.5%) not being covered by insurance relating to events closures caused by the current pandemic. Representing 65 independent festivals in the UK, including 2000trees and Sheffield’s Tramlines festival, the AIF stipulates the costs incurred are mostly the result of a potential sum £800m worth of customer refunds for events scheduled to have taken place this summer, with an average overhead figure of £375,000 for each festival when marketing, staff wages and advertising are taken into account.

These fees are reportedly non-recoupable, with a survey among AIF members finding that redundancies within this sector stand at an average of 59%. Without any financial support, over half of this industry’s workforce will be put out of work between September of this year and February 2021.

AIF chief executive Paul Reed identifies the difficulties faced by many independent festivals to qualify for governmental business interruption loan schemes, because they are unable to satisfy the appropriate criteria. The so-called “bounce-back loan scheme,” meanwhile, which is capped at £50,000, does not sufficiently cover the financial damage suffered from the loss of income throughout the year ahead.

More specifically, declaring, “It’s not a temporary shutdown of business – this is an entire year of income and trade essentially wiped out,” Reed highlights the seasonal nature of the festival sector as a cause for specialised challenges. “It’s really different from a retail business, where … they can get to a point where they can reopen, mobilise and bring staff back in. The vast majority of our members are focused on the delivery of one single large event across the entire year, and that’s all been wiped out.”

A summer devoid of festivals has detrimental implications for much of the music sector, which is expecting losses totalling £900m this year – or 81% of its yearly contributions to UK economy – according to figures published by the UK Live Music Group.