Welcome to this week’s PA’s PA in a week in which all eyes were on the Chancellor as he delivered his Autumn Statement and the Government’s public spending plans for the next five years. The impact of particular announcements on publishing are explored below but the general response from commentators seems to have been one of relief; the cuts not appearing to be as deep as had been feared. Police budgets are protected, there is more money for the NHS and the Chancellor has performed a U-turn and abandoned the planned tax credit cuts. It will mean, however, that by 2020 the Department for International Development’s budget will exceed that of the Home Office’s. ‘The devil will be in the detail’ is also fast becoming one of the most commonly used phrases and that is certainly a view held by us as well.
There were four key areas which we were looking out for closely: (i) the future of the research councils and the level of the research budget; (ii) whether schools funding remains protected and the impact on resource budgets for sixth form colleges in particular; (iii) the scope and size of the proposed Apprenticeship Levy; (iv) and the settlement for local government and the potential knock-on effect on library services. Given the highly pessimistic trailing of this Spending Review, we are not expecting good news in any of these areas and so, while not all is good, we have been somewhat pleasantly surprised by what has been announced. The Bookseller also provides a good run down here. Apprenticeship levy
This is really where the devil will be in the detail. As anticipated, the Chancellor used the Autumn Statement to announce that the levy on businesses to fund the government’s manifesto pledge of having three million apprenticeships by 2020 will be fixed at 0.5% of a company’s payroll and payable by businesses whose payroll bill is over £3million, with employers receiving an allowance of £15,000 to offset against their levy (further detail is available here). This does appear to be an attempt to limit the payment of the levy to larger companies but it is still incredibly unclear how it will work in practice and is already being billed as a new ‘Payroll Tax’ by not only the Institute of Directors but also the Office for Budget Responsibility. We are told that it will be ‘business-led’ with the management of the levy being done by a new independent employer-led body which will set apprenticeship standards and ensure quality and advise on the level of levy funding each apprenticeship should receive but the CBI’s new Head Carolyn Fairbairn has been particularly critical calling the levy a “sting in the tail” of the Spending Review for employers. Further criticism has been made of the apparently 20% of the levy pot which will go on administering the levy and not towards actually creating apprentices at all. It also remains unclear how, if at all, businesses existing training schemes will be folded into the new regime. There was also no mention of funds raised by the creative industries being able to be ring-fenced for use by the creative industries – a point we have put in our submission. We will be meeting Creative Skillset and the Business Secretary in the coming weeks to discuss the detailed design of the scheme. Research
There was serious concern over the fate of the country’s research budget in the Spending Review which failed to materialise. The Chancellor instead announced a commitment to protect the budget for science “in real terms so it rises to £4.7 billion.” The Chancellor also confirmed that the Government will be taking forward the recommendations of the Nurse Review for the creation of a new body, Research UK, which will, subject to legislation, oversee the work of the research councils. What is not yet clear (and it is very much here that the detail will be so important) is what powers Research UK will have in relation to allocation of funding, how this will impact funding for OA and indeed higher education more generally. In addition, the Government will initiate a review of the Research Excellence Framework in order to examine how to simplify and strengthen funding. The Guardian has reaction from the research community here. Education and local government
Schools received a mixed bag of news in the announcement. Schools budgets are protected along with FE colleges but 2017 will see the introduction of a new national funding formula. This will see a national rate set for each pupil, with extra funding for those with additional needs – a move to address the regional discrepancies between funding. Early years education also took a hit with the introduction of a threshold of number of hours worked in order to qualify for the 30 hours of free childcare. The Chancellor also announced moves to extend the academy principle to sixth form and further education colleges. Teachers' unions said that despite redistributions of funding, the overall national picture remained a forecast fall of 8% in real-terms school budgets. The BBC provides a summary here. Local government also took a hit with sweeping changes announced to their funding settlements. While they are being given more powers to raise money locally, the loss of the security of the central government grant is causing concern and will likely impact library services. The Guardian provides a useful summary here. Literacy programmes
There had been a real worry that the already small Department for Culture, Media and Sport budget would receive a further massive hit, leading to significant cuts to the Arts Council and its funding of key literacy programmes such as Booktrust. With the overall budget cut less severe than had been anticipated, it looks like good news for these programmes but again we will need to see the detail. Read more here.
Transition arrangements for the repeal of Section 52
Further to PA’s PA of 30.10.15 we remain extremely concerned about the Government’s proposed arrangements for the repeal of Section 52 of the CDPA, the effect of which will be to reinstate the full term of copyright protection to 3D artistic works, whether created as a one-off or industrially manufactured, and 2D images of them. This has obvious implications for books and other publications which contain photographs of such works. As previously reported, the Government, following a legal challenge, pulled its original plans which would have seen a transition period for the repeal to take effect of five years. It is now proposed that this period will be only six months from the date of the consultation, giving publishers very little time to review their backlist, current and upcoming titles and make sure they do not infringe copyright by including images for which they do not have the correct licences. The PA, with a number of publishers, attended a roundtable at the IPO this week where we hoped to hear exactly why the Government, having previously believed that a five year transition period was appropriate, is now of the total opposite view. Unfortunately, we did not get the clarity we were looking for. We have started to escalate this within the IPO, setting out the main areas where we believe the Government is acting unreasonably and failing to take into account the concerns, and business practices, of publishers. In particular, we would like to know why the Government a) has started the clock ticking before they have gathered any evidence of the harm this would cause and b) why there is no option for the use of 2D images of 3D works in published materials to have a different transition period to the sale of replicas of the actual 3D work.
Literacy and Reading for Pleasure
As a member of the National Literacy Forum, The PA has signed up to its Vision for Literacy Business Pledge. This sees businesses across the UK pledge to raise the importance of literacy with their workforce, within their local communities and contribute to the national debate. A number of publishing houses have also signed up. Please contact Susie at The PA if you would like further information about how your company can get involved.
This week we have:
Met with the BBC and discussed how its Get Reading initiative, running next year, will be able to amplify The PA’s own Reading for Pleasure campaign; attended the IPO roundtable on Section 52; caught up with Iain Wright MP at a CICI lunch; attended the export sub group and the diversity sub group of the Creative Industries Council; met with FEP colleagues in Strasbourg for its General Assembly and Annual Author-Publisher Dialogues in the European Parliament; briefed Mary Honeyball MEP on UK publisher views on the digital single market.
Next week we will be:
Meeting with Google Pay for Education; attending a Creative Skillset workshop on the apprenticeship levy; holding the inaugural meeting of the All Party Publishing Group; discussing the UK position on the EU digital single market strategy with Number 10; meeting with the Read On Get On coalition partners; attending the education and skills sub group of the Creative Industries Council; and celebrating the UK as Guest of Honour at the Guadalajara Book Fair with the Secretary of State for Culture, Media and Sport John Whittingdale MP, the UK’s Trade Envoy to Mexico Baroness Bonham-Carter and Sir Vernon Ellis, Chairman of the British Council.