Insights Government provides Department for Digital, Culture, Media and Sport with £0.6 billion cash increase and extends some cultural tax reliefs in its Autumn 2021 Budget

On 27 October 2021 the Chancellor, Rishi Sunak, delivered his Autumn Budget and Spending Review 2021 (SR21). The SR21 sets departmental budgets up to 2024-25. In terms of the digital, media, and telecoms sectors, the Government is to provide the DCMS with a 2.9% increase per year on average over the SR21 period to invest in digital connectivity, culture, innovative industries and community cohesion across the UK.

The Chancellor says that the UK will benefit from improved digital connectivity and mobile coverage through investment to upgrade the country’s digital infrastructure. The settlement:

  • confirms investment of £1.2 billion (from 2021-22 to 2024-25) of the £5 billion Project Gigabit commitment to level up all parts of the UK with a target of 85% high-quality, gigabit capable broadband coverage by 2025; and
  • provides £180 million over the next three years as part of the Government’s £500 million investment for the Shared Rural Network, to deliver high-quality 4G mobile coverage to 95% of the UK.

As for the tech sector, the settlement commits:

  • more than £50 million over the SR21 period, including a doubling of AI and data scholarships, and funding an ambitious agenda on data policy and digital identities; and
  • over £110 million over the SR21 period for the new online safety regime through the passage and implementation of the Online Safety Bill.

The Government says that the settlement will grow the UK’s culture and heritage sectors by:

  • providing £52 million in new funding for museums and cultural and sporting bodies next year to support recovery from COVID-19, and an additional £49 million in 2024-25 to thrive thereafter;
  • providing £14 million in each year of the SR21 to support the creative industries, including supporting SMEs to scale up and providing bespoke support for the UK’s independent film and video game industries; and
  • funding the £800 million Live Events Reinsurance Scheme and an extension to the £500 million Film & TV Production Restart Scheme, to enable UK events and productions to thrive and plan with certainty.

Overall, the Chancellor says that the settlement will support the delivery of the following priority outcomes:

  • increase economic growth and productivity through improved digital connectivity;
  • increase growth through expanding the use of data and digital technology and increasing innovation, while minimising digital harms to the UK’s economy, security and society; and
  • grow and evolve the UK’s culture, sport and creative sectors domestically and globally, in particular those most affected by COVID-19.

The Government is also increasing public investment in R&D to £20 billion by 2024-25 (including funding for EU programmes).

Alongside this, the Government is reforming R&D tax reliefs to support modern research methods by expanding qualifying expenditure to include data and cloud costs, to more effectively capture the benefits of R&D funded by the reliefs through refocusing support towards innovation in the UK, and to target abuse and improve compliance.

To support the cultural sectors, where the pandemic’s impacts are still being felt, the Government will continue to fund the Film & TV Production Restart Scheme and the Live Events Reinsurance Scheme.

Further, from 1 April 2022, production companies will be able to switch between claiming Film Tax Relief (FTR) and High-End TV Tax Relief during production, ensuring that relief is not lost should a company decide to change its distribution method.

The UK’s cultural sectors will also benefit from temporary rate uplifts to the Theatre, Orchestra and Museums & Galleries Exhibition tax reliefs until 31 March 2024.

To access the Budget and Spending Review 2021 in full and for links to all supporting and related documents, click here.