Budget Cuts: The communications and media industry verdict

The Drum gauges the reaction to yesterday's public sector spending review announcements made by George Osbourne, speaking to the CIPR, Marketing Society and the IPA amongst others.

Jane Wilson, CEO of CIPR

Following the recent announcements and likely impact to the Public Sector and the consultancies who serve it, the CIPR is currently looking at how we can advance the profession through this period and ensure that our practitioners are fully trained and supported with the right skills to face the challenges that await them.

 As a result of cuts in public spending, there will be a wide ranging effect on PR practitioners, particularly those working in-house in the Public Sector. Those who are left following the cuts are likely to be challenged to work in a very different way. They will have to think and act more like consultants and will be more likely to work from PR hubs which may serve several departments or even organisations. This will require a new approach and new skills for traditional in-house practitioners.

 And with many PR professionals also facing redundancy, we are likely to see a surge in freelancers and contractors entering the market at a time when remote and home working has never been more accessible. It will be interesting to see whether any of the award-winning consultancies of tomorrow will result from the catalyst of today’s announcements. This really is a boom or bust moment.

Simon Bassett, managing director of marketing and communications recruiter EMR

Mervyn King has said the UK could be in for a sober decade.  For those working in the advertising, branding, marketing, and communication functions in the public sector, sober doesn’t really cover it – ‘prohibition’ might be more appropriate.  With front line services baring comparatively small cuts, it falls to back office functions like communications to deal with much bigger cuts.  In the last year, the government’s Efficiency and Reform Group has stripped out £27 million from budgets that were previously earmarked for websites, advertising, and marketing.  They have also introduced a freeze on all new ‘non-essential marketing and advertising spend’.  So the cuts to public sector departments announced today are set against an already gloomy background.

The only good news is that that these cuts have not been a surprise.  Communications professionals have been leaving the public sector in their droves over the last year.  The writing’s been on the wall since City Hall was turned over to the Tories inMay 2008.  The cuts made to the communications function were brutal – and that was before the financial crisis had really hit the wider economy.

Fortunately, the private sector job market is in much better shape – EMR has seen 38% more private sector marketing and communications vacancies this year compared to 2009.  The floodgates have been opened with more marketing and communications professionals now seeking to progress their career, having sat pretty through the recession.  Private sector momentum is already gathering.”

Gemma Greaves, Marketing Director, The Marketing Society

The far reaching nature of the Comprehensive Spending Review is likely to affect our members in many different ways in the months to come. One thing that is clear from today’s announcement is that in this age of austerity it is essential that the commercial leadership skills of marketers play a central role in helping lead the country out of recession. It will only be through innovation and creativity that solutions to the challenges laid down by today’s announcement are found.

Whilst clearly presenting a challenge to the BBC, we welcome the proposed investments to be made in super-fast broadband and the opportunities that these will offer to the creative industries. We also welcome the great emphasis the Chancellor has placed on green issues and in particular the investment in off shore wind farms and the creation of a green investment bank. The Marketing Society has long called for the empowerment of marketers in helping consumers to choose green and therefore these changes will greatly enhance the public’s ability to act sustainably.

Richard Ellis, communications director for PRCA

Given the depth of today’s cuts, any campaign or activity that cannot prove it’s an effective use of money must expect to be axed. Measuring column inches in the paper does not prove value. Communicators need to be using metrics that provide a business case. We must show that our campaigns reduce hospital admissions or that by engaging local communities we have reduced the cost of street cleaning.  We’re in this together and we should be sharing our best metrics through the PRCA and LGComms, helping one another to really quantify the value we provide

Graeme Atha, chairman of The Marketing Society Scotland

The public sector cuts are likely to have a significant effect on our industry and especially with those agencies who have become heavily reliant on this sector. Now more than ever agencies will have to work harder and smarter to encourage their clients and prospects – large and small - to invest in effective marketing as central to business growth.

James Turgoose, head of parliamentary Affairs, Westminster Parliamentary Research

The coalition is taking a leaf out of Labour’s “playbook” in the way the cuts were presented. Clever politics from George Osborne enabled him to present that average cuts across all departments was 19%.  He compared this with his interpretation of Labour’s spending plans outlined in March which he calculated as an average of 20% cuts across the board. 

Immediate impacts on the communications industry have already been well documented with the COI planning for dramatic reductions of both people and spend.  Added to the Cabinet Office instructions that all government departments must seek approval before commissioning any support by external consultants, including those specialising in communications and marketing.

Whilst this will be bad news for many in the industry dependent on public sector contracts, we will be keeping a watch for the first department to break ranks and hire consultants to advise on the implications and implementation of the reductions in their budget.

Geoffrey Russell, director of affairs for IPA 

Advertising has long been recognised as the oil which keeps the wheels of the economy turning - that oil has never been more vital than now.

Mark Henshaw, head of media for Grant Thornton

The Spending Review provides a triple edged sword for the broader media industry.

It provides protection for three media outlets (BBC Worldwide, Monitoring and S4C) as their funding appears to be ring-fenced, however the knock-on effect, given the BBC's income will not be increasing through licensing fees, will be less to spend on programming.

Also the capping of BBC's spend online and its competing with independent local radio provides good news for the commercial media industry, increasing individual operators' ability to monetise their services and products either digitally or through broadcast.

Finally, an interesting observation, despite a lot of coverage earlier this week, there was no mention of the COI campaign relating to public information being migrated away from independents to the BBC which for now appears good news for media buyers and broadcasters.

Iain McMillan, director of Confederation of British Industry Scotland’s

Given the awful state of the public finances, a tough programme of fiscal consolidation and public service reform is needed to eliminate the public spending deficit, let alone address the expanding national debt and rising interest payments. We support the effort to eliminate the deficit in a timely fashion, with the majority of the reduction coming through savings rather than further tax rises, and the Chancellor is right to press ahead with this.
 
It is important that the Scottish Government, in its own upcoming Spending Review next month, acts to reform public services and protect GDP-enhancing investments in infrastructure as well as support for skills development, research and development, and business support. This will enable firms to grow and create jobs.
 
The move to release the fossil fuel levy monies is welcome and follows our representations to the Chancellor on this very issue. This will fund much needed infrastructure in Scottish ports and harbours to support the development and expansion of the low carbon economy and renewable energy sector.