Creative Industries Sector Plan
Creative Industries Sector Plan
Along with the release of the Government’s Modern Industrial Strategy came the release of six individual Sector Plans. In this briefing, CEDOS are focussing on the Creative Industries Sector Plan. The ambition for the Sector Plans is that:
“By 2035 the UK’s position as a global creative superpower will be enhanced with the UK becoming the number one destination worldwide for investment in creativity and innovation.”
The creative industries are identified as being a huge success for the UK economy, being a major employer, exporter of services and pull for inward investment. The creative industries currently generates £124bn of Gross Value Added and supports 2.3m jobs across the UK. The UK is home to globally competitive businesses, world class cultural infrastructure and a string adopter and innovator in new technology.
The creative industries are a highly productive sector and help to shape the national conversation about the nation, both at home and how the UK is perceived abroad. For the creative sector, output has increased by 1.5 times the rest of the economy between 2010 and 2023 and 42% of creative businesses anticipated they would grow by more than 20% in the next year.
Despite the sector being ubiquitous across the UK, a total of 67% of the Gross Value Added of the sector is generated in London and the South East, with other UK city regions also being hubs for the sector.
The development of the Creative Industries Sector Plan was supported by the Creative Industries Taskforce, the Creative Industries Council and the Creative Industries Policy and Evidence Centre, after a period of consultation. The key aims of the plan are:
- To increase Business Investment from £17bn to £31bn by 2035
- Accelerate innovation-led growth
- Secure growth finance for creative start-ups and scale-ups
- Build a resilient workforce fit for the future
- Increase trade and inward investment
Within the creative industries sector plan there is a general focus on four relatively broad ‘frontier’ sub-sectors, selected as they are key employing sub-sectors, are well connected and drivers of grow in other sub-sectors and have high growth potential. These are:
- Film and TV,
- Video Games,
- Music, Performing and Visual Arts,
- Advertising and Marketing,
Across the creative industries, ‘Createch’ is a key area of focus, where businesses use combinations of innovation and cutting-edge technologies (including AI and Extended Reality) to generate novel products, services and experiences. ‘Createch’ businesses are found across all creative industries sub-sectors and currently generates £18bn Gross Value Added and supports 160,000 jobs.
‘Createch’ has already been transforming creative consumption/audiences and production techniques. Increasing adoption of ‘createch’ is likely to further transform the sector by 2035 and create new and dynamic economic opportunities for the UK.
The creative industries sector broadly operates as an ecosystem, whereby the sector has an impact greater than the sum of its parts based on a cross-over of inter-connected SMEs across a range of disciplines, micro businesses and freelancers. Talent in the sector can often work across sub-sectors and there is frequently a range of collaborative projects in areas such as music and television or games technology and film.
Despite this overall positive background, the creative industries sector is being held back by a range of barriers in innovation, finance, skills and ability to export.
Given the complex nature of the sector, without the production in most cases of a physical ‘product’, some of the proposed success measures for the creative industries veer away from those proposed in the wider Modern Industrial Sector and focus on:
- Overall Success of the Sector based on increases in GVA and productivity per hour worked.
- Crowding in Investment, based on gross fixed capital formation in the sector.
- Innovation, including R&D expenditure and percentage of Innovation Active businesses.
- People and Skills, density of skills gaps and shortages, in-work training and median annual earnings.
- Exports, volume and value of export earnings.
- Place, Gross Value Added by region.
The strategy is focussed around a number of key strands of activity. Firstly, the plan aims to increase public and private levels of Research and Development investment in the creative industries to Accelerate Innovation Led Growth. The plan aims to make the UK the best place to start and grow a ‘createch’ business and to support the creation and value of Intellectual Property. To achieve this, it is recognised that there are regional disparities in levels of innovation in the UK economy that will need addressing.
UK Research and Innovation (UKRI) have been given the lead role in strengthening the Research and Development ecosystem for the sector and during 2025 have been tasked with producing a new Creative Industries Research and Development Strategy. The approach will streamline Innovate UK funding for startups and scale-ups and will support access to Horizon Funding.
UKRI will receive £100m to support initiatives in the sector including the next wave of Research and Development Creative Clusters, bringing together SMEs and Universities and £25m for a Creative Futures programme which will expand the CoSTAR network, add new R&D labs and showcase spaces to strengthen commercialisation and tech adoption (branded as ‘Create Smarter).
UKRI will strengthen support for commercialisation and tech adoption within the creative industries, including working through the Catapult Network, investing in Doctoral awards and Academic/Industry placements and in Creative Industries Policy and Evidence Centre.
Government will produce revised guidance for tax relief for creative projects in 2025 and how creative businesses can make the most of Research and Development tax relief.
Government is currently reviewing a consultation on revising copyright legislation so that it is relevant for the digital age and allows AI to benefit from creative content, whilst protecting the rights of creators. There are also plans for a new Creative Content Exchange, a marketplace for selling, buying, licensing and enabling permitted access to digitised assets. This will open up new revenue streams and allow content makers to commercialise assets.
A second priority is to Secure Growth Finance and make the UK the best place to invest in creative businesses. It is recognised there is a £1.4bn equity gap in the sector, with most equity investments in London and the South East and mainly in IT/software elements of the sector. A total of 30% of creative firms lack knowledge about finance options, with the gap wider for female owned businesses.
There are often high development costs for new products/innovations within the sector and investors often have a risk aversion to investing in creative businesses, to which the public sector has often been the answer. The creative sector often struggle to secure up-front finance and often lack the capacity and networks to secure growth finance.
Government will increase support for the sector from the British Business Bank, covering both debt and equity finance and will set up a working group to tackle barriers to Intellectual Property backed lending. Specialist Venture Capital Fund Managers will be funded to support the creative sector.
There is also commitment to create a single ‘front door’ to access information on how to access private finance and improve signposting, including through the Business Growth Service. Six Mayoral Strategic Authorities will also receive investment to support creative businesses access finance through the £150m Creative Places Growth Fund, explored later in the briefing. There will be a further update on the next steps on access to finance by the end of the year.
Accompanied by Skills England Sector evidence on the growth and skills offer for the creative industries, the Sector Plan puts in place a plan to Build a Resilient, Skilled and Diverse Workforce For the Future. Nearly half of all vacancies in the sector are reported as hard-to-fill and these vacancies are more likely to be due to skills shortages (particularly in professional and associate roles and ‘createch’ roles).
Building a high quality workforce is deemed important to increase productivity, resilience and diversity in the sector. The Skills England sector evidence demonstrates clear barriers due to timeframes of creative businesses taking on Apprentices, which account for only 2% of new hires.
Much of the emphasis on skills interventions is on changing the role of creativity within the educational curriculum. This includes launching a new National Centre for Arts and Music Education, the potential for curriculum changes post the after Independent Curriculum and Assessment Review, £3m to expand the Creative Careers Programme and a £132.5m investment to increase disadvantaged young people’s access to enrichment.
Through the wider Growth and Skills offer of Skills England and the Jobs and Careers, there will be greater flexibility for employers and learners and there are links to wider skills initiatives through the Modern Industrial Strategy. This will include further Skills Bootcamps and short courses funded through the Skills and Growth Levy in areas such as AI, along with investment in activity to broaden diversity.
The importance of freelance labour to the sector is identified within the plan, but there are very limited interventions to support the development of the freelance sector – aside from appointing a Freelance Champion and wider action on Worker’s Rights.
The skills element of the sector plan, given the cross-over with technology and digital, is relatively light in terms of sector specific investment and interventions at this stage. There may be more detail in the Post 16 Education and Skills Strategy.
The plan also wishes to Increase Trade and Exports from the creative sector, linked to the UK’s Trade Strategy, with specifics to be incorporated into future trade deals. This includes agreeing supporting travel/cultural exchange within the EU for artists/musicians, the sector participating in an £80m expanded UK Export Finance offer and increasing the number of DBT sponsored trade missions and promotion for the creative industries. There will also be work to improve Intellectual Property protection as a barrier to overseas trade.
There will be a wider pro-growth regulatory framework around the creative industries in areas such as broadcasting, planning, licensing and advertising. There are also proposed changes to licensing to support live music as part of the Licensing Taskforce Review and a consultation on ticket resale and pricing practices in live events sector.
The Creative Industries will also be included within the 2026/27 Business Rates review and proposed planning reforms should speed up development of large infrastructure and venues.
DCMS and DBT have committed to improving access to statistics, evidence and data, with a review of SIC Codes forthcoming, which has always been a bugbear of the creative sector that businesses rarely fit into neat boxes and the scope of the sector is frequently underestimated.
One of the key priorities is boosting growth in the creative sub-sectors with the highest growth potential. Within these four sub-sectors, there are specific measures and aims highlighted.
Film and TV
- The UK is already a global centre for production, securing £4.8bn of inward investment and co-production value in 2024
- UK films commanded over a fifth of global box office revenues in 2024
- Great strength in UK public service broadcast sectors which can be utilised to ensure a vibrant domestic screen sector
- Key strengths in visual effects, virtual production and next generation content
- 65% of freelancers have reported difficulty finding work in last year
- Continued disruption from creator content sector
- Rising production costs, barriers to securing finance and to protecting IP
- There are some persistent skills gaps and diversity challenges in the sector
- A £75m Screen Growth package over 3 years to develop independent UK screen content, support inward investment and showcase best of UK/international film
- Work with stakeholders to review and ensure the effectiveness of tax reliefs
- Develop a ScreenSkills 5 year strategy, including improving careers guidance
- Scale-up the BFI Film Academy to support 16-25 year olds from under-represented backgrounds, £10m investment to expand the National Film and Television School, including attracting private investment
- Support national broadcasters to adapt to change
Video Games
- The UK is one of the best places in the world to create video games, including hosting globally leading publishers and developers
- UK is one of the largest games exporters
- 80% of games developers are based outside of London
- The jobs are highly productive and have spillover benefits based on the cross-over between tech and creativity
- Games technology contributes £1.3bn GVA to other sectors such as
- Links to other sectors including autonomous vehicles, Virtual Reality, TV and Film and eSports
- £30m Games Growth package over 3 years to back the next generation of start-up studios and talent and to drive inward investment
- Tax reliefs for games developers and additional investment enhancing the UK Games Fund to support new skills and titles
- Games development to be part of the TechFirst schools programme to support the next generation of tech pioneers
- Establishing a new industry led UK Video Games Council
- A new sector led Video Games Skills Strategy during 2025, published by a UK Games Skills Network
Music, Performing and Visual Arts
- UK has third biggest music market and is the second biggest music exporter after the US. Global revenues are projected to double by 2031.
- Digital platforms are reducing the barriers to entry but increasing competition makes it harder to break through. There is a need to support new talent pathways.
- Touring the UK is harder and many grass roots venues are closing, with associated spillovers for the hospitality sector and high street
- The UK has the second largest art market in the world, with art within the UK’s Top 30 exports, worth £4bn in 2024
- The theatre sector contributes £1bn per annum and supports 135,000 jobs. There is increasing collaboration with the music and screen sector
- There is a huge strength in educational infrastructure in the creative arts
- A £30m Music Growth package to help more emerging domestic artists with touring, performance, mentoring, export opportunities
- A ticket levy on large stadium gigs, generating £20m per year, administer by the LIVE Trust, to bolster the grassroots music sector including festivals, venues, artists and promoters
- An Industry led agreement on music streaming, aiming to boost earnings for creators
- As announced at the EU Summit, a travel and cultural exchange package to be pursued, including market access for touring artists
- Delivering transformative capital spend for arts venues
Advertising and Marketing
- UK is the second largest exported of advertising and marketing services at £18bn
- Only a third of advertising firms currently export
- Advertising is an early adopter of AI and technology and a central force in the digital transformation of the economy
- Regulation to maintain trust will be important in the digital age and as AI becomes more commonplace. An Online Advertising Taskforce will be established.
- Accelerator programmes will be developed for adtech businesses
- Create opportunities for smaller advertising agencies within public sector procurement opportunities
The plan aims to realise the potential of creative clusters across UK city regions and wider cluster areas, particularly where creative disciplines combine to add value and build strong supply chains and Gross Value Added. The key headline is Greater London will be classified as a ‘creative supercluster’, although it is unclear how much, if any, additional Government investment will come with this designation – or whether projects and businesses in London will naturally dominate national investment programmes for the sector.
Along with the previously mentioned Research and Development Creative Cluster programme, there are six Mayoral Strategic Authority areas that have been awarded a share of a £150m Creative Places Growth Fund to deliver a range of investment readiness support (West of England, Greater Manchester, Liverpool City Region, North East, West Midlands and West Yorkshire). The fund will support a range of investment readiness activity including mentors, expert guidance on presenting business models/plans to financiers, support for registering Intellectual Property and copyright and support building connections to investors.
It is not clear at this stage whether the Crate Places Growth Fund will be expanded and extended to other areas to participate as part of further devolution, or is a fixed programme for these specific six areas.
Government also want to support Creative Corridors across areas such as the Northern cities, West of England and into South Wales and the Thames Estuary – although detail on how this will be facilitated and funded (if additional funds are needed) is unclear in the Sector Plan.
This is not a traditional national Creative Industries plan, There is a laser focus on ‘createch’ and sub-sectors of the creative industries that generate Gross Value Added. The spillover benefits from the sector are solely identified as being economic.
This sector plan does not place the traditional Arts Council England/cultural agenda at its heart and for many Local Authorities with existing strategies for the creative industries, there may be limited read across in terms of aligning priorities. There is virtually no mention of supporting individual artists, cultural regeneration or cultural and creative tourism. Whilst performing arts are a key sub-sector, most of the new investment is skewed towards the music sector.
There is also an ongoing review of Arts Council England taking place, including their capital expenditure programmes. It is not clear whether the outcome of this review process will mean Arts Council England investment will be more focussed around priorities within the Sector Plan.
The more general creative industries support programmes for start-ups and established businesses are also conspicuous by its absence. There was no real guidance as to how Local Authorities might use their local cultural and creative assets, especially related to performance and visual arts (which as key sub-sectors have relatively little intervention attached).
At a local level, the sector will feature in 10 year Local Growth Plans to be developed by Mayoral Strategic Authorities, but the emphasis of the sector plan is clearly based around city-regions. The Creative Growth Fund is primarily focussed on major urban areas, the Growth Corridor is proposed across Northern city regions and the clear opportunities for clustering are predominately urban such as the Thames Estuary Production Corridor. A Creative Places group will be established as part of the Sector Plan, which will include invites to the highest-potential Mayoral Strategic Authorities.
Overall, the plan is heavily skewed towards a mix of innovation and private investment being the drivers for growth in the creative industries at a national level – which for many local areas with creative businesses outside of the four identified (although relatively broad) sub-sectors may not be where the key opportunities lie.
As with the broadest theme of the Modern Industrial Strategy, the emphasis is to focus on supporting and investing in winners, which are likely to be heavily spatially concentrated. The links between the Creative Industries Sector Plan and Digital and Technologies Sector Plan are clear, especially around skills, AI adoption and innovation. The approach is heavily based around trickle down economics, more so than the Modern Industrial Strategy.
The focus on innovation is likely to bring Universities and innovation agencies much more to the fore in the sector. Where this all leaves more locally driven creative industries approaches in this model, where the creative sector is a tool for regeneration and town centre vitality, often centred around business support, access to markets, network development, workspace and cultural tourism remains to be seen.
A strong national, growth driven framework for the creative industries has been a policy gap for a while and inclusion of the sector within the IS-08 in its own right as a GVA producing, export led, highly skilled and productive sector is positive. The inclusion in the Modern Industrial Strategy overall should reduce the need to constantly justify the role and impact of the sector.
Within the plan, there are clearly positive opportunities to support local producers and performers, especially in the music sector, opportunities to support digitisation and adoption of technology within the sector at a local level and to help local businesses raise the finance needed to grow and export.
The main outcome of this Sector Plan for Economic Development and CEDOS members will likely mean a rethink for many areas about how they approach and develop the creative sector in their localities.