The SIC of it: why has the events industry been left behind?
Back in July I wrote a piece entitled ‘Why has the events industry been left behind’, and it seemed to resonate. Indeed, some 17,000 of you read it. The thrust of the piece was that the events industry is not correctly administrated by Companies House, and in short, many businesses that operate in the UK’s world of events are assigned elsewhere. The net result being that, in black and white on the paper before them, in the eyes of HM Treasury and Office for National Statistics (ONS), the events industry does not exist…in the way we say it does.
The £70bn value figure that we use to articulate the size of the industry is the result of some Herculean research, and not a figure awarded to us by central Government.
Social media is awash with comments lamenting the Government’s failure to fully recognise the industry and its value, especially as Brexit is back on the agenda.
While the short-term objective of our sector is to simply survive the Covid-19 pandemic, we must work towards developing a formal structure in the SIC code system in the medium-term.
However, this presents a challenge.
First of all, we must have a full set of SIC codes. At present, of the 752 codes that exist, only three directly link to the events industry. They are: Section N, code 82301 assigned to ‘activities of exhibition organisers’, code 82302 ‘activities of conference organisers’, and Section I notes code 56210 is assigned to ‘event catering activities’.
So, not much to go on for an industry as diverse as ours.
Ahead of writing this feature, I took myself to Companies House where, armed with a sample list of 100 venues, organisers, agencies, and suppliers, I investigated who is registered as what.
The results were illuminating and prove the point I am trying to make. Of the 100 businesses I selected off the top of my head, only 25 were assigned to one of the three available SIC codes.
About half of them are registered as ‘96090 - Other service activities not elsewhere classified’. Many venues are registered as ‘55100 - Hotels and similar accommodation’. Agencies were the biggest “offenders”, with SIC code assignments including ‘59112 - Video production activities’, ‘73110 - Advertising agencies’, ‘70210 - Public relations and communications activities’, ‘79120 - Tour operator activities’ and ‘70229 - Management consultancy activities other than financial management’.
Only four of the agencies (including some of the largest) were using one of
the event-assigned codes.
At this juncture you will correctly remind me that this is expected, as there are insufficient codes, but all of the agencies I selected do involve themselves with conferences, so why not select that code, which is available? Businesses can select multiple codes, not just one.
That, though, is beside the point. The real issue here is that every events business that has not registered as one of the three events-assigned SIC codes (regardless of their accuracy), is essentially contributing to other sectors. SIC codes are the tools in which a sector is measured.
When the chancellor of the exchequer, Rishi Sunak, was going through his list of which sectors he saves and which he doesn’t see as worthy of saving (in terms of their financial weight), he was unwittingly looking at other sectors which have been inflated by events business.
This is no more true than with hotels in the hospitality sector. I do not have any official statistics, but we all know many events take place in hotels, either for the day or over multiple days. As you would expect, most of the hotels I checked out on Companies House are registered as ‘55100 - Hotels and similar accommodation’, although weirdly not all. Some are also registered as ‘68209 - Other letting and operating of own or leased real estate’. I don’t know why.
So, every time you pay your hotel venue for the events space, that money is not being viewed as event revenue in the eyes of the Treasury, but rather just making it look as if lots of people are staying at hotels. The same is true of sporting venues such as stadiums, which use event revenue as a secondary stream.
Venues which exist solely to service events are a mixed bag with how they are registered, only two on my list are related to the events industry. Some I couldn’t even find.
Then there are those on the supply-side of the industry, such as those providing event technology, exhibition stand building, signage and so on. Catering, mercifully, does have its very own SIC code, although one of the country’s largest contractors doesn’t actually use it, opting instead for ‘74990 - Non-trading company’. Yes, I triple checked.
Many event technology firms are registered as ‘63990 - Other information service activities not elsewhere classified’ and one furniture hire company uses ‘93290 - Other amusement and recreation activities not elsewhere classified’. One major supplier of event services isn’t registered as a UK company and therefore its (presumed) mammoth contributions aren’t registered in a way that would strengthen our case.
Dedicated organisers, albeit more on the exhibitions side than conferences, are the group which consistently uses the assigned SIC codes, perhaps unsurprisingly. There are a few weird ones, such as one organsier of note registering themselves as ‘64209 - Activities of other holding companies not elsewhere classified’.
Ideally, what we want is for every business operating in the event supply chain to register themselves as an events business on the available codes in the short term, but it is understandable that some may want to do the opposite.
God forbid anything like this were to happen again, but people are going to look back at what businesses the Government decided to save during Covid-19. Why would they willingly assign themselves to a sector that was essentially ignored? Unless we all re-register using the available codes to show the strength of our sector, I can’t see that changing.
Of course, unless the SIC codes are revised (and I can tell you that the Business Visits and Events Partnership (BVEP) is already working on this), then we will never be recognised as the industry we know we truly are.
The Government will not pay attention to us when we tell them the events industry as a whole is (or was) worth £70bn to the UK economy each year. They are only interested in what the audited accounts on Companies House tells them, and right now, we are telling them we don’t exist.