A Maker's Guide to the Cost of Living Crisis

The cost of living crisis continues to affect makers and the craft community. We know many makers are worried about their finances including income, rising studio rent, energy and materials costs - and the negative effect on their mental health. 

The cost of living crisis refers to the fall in ‘real’ disposable incomes (that is, adjusted for inflation and after taxes and benefits) that the UK has experienced since late 2021.  

It is being caused predominantly by high inflation outstripping wage and benefit increases and has been further exacerbated by recent tax increases. 

Other factors contributing to high inflation are the rising cost of raw materials following the pandemic and global extreme weather conditions, the war in Ukraine and other socio-political events happening in the world. 

At Craft Scotland, we are committed to keeping the sector informed during this challenging time. Our Maker’s Guide to the Cost of Living Crisis lists resources and tips to help prepare your craft business for the months ahead. This page will be updated regularly as developments happen. 

Our Director, Irene Kernan is working closely with Creative Scotland and other arts and cultural organisations and funders to assess the situation.  

In our role as the national development agency for craft, we will continue to advocate on your behalf and that of the contemporary craft sector to Scottish Government, local authorities, funders and UK agencies. 

Thank you to all those who filled in our Sector Survey, we will publish the results this Autumn/Winter and share the impacts of the cost of living on the sector. We will shortly launch a survey focusing on craft destinations, organisations and initiatives to ensure we are gathering a full picture of the sector. The results of the survey will be shared and promoted widely to demonstrate the need for more support for the sector. 

Get in touch 

If there are specific challenges you are facing, or types of support that would help you during this time, please get in touch with the team: hello@craftscotland.org.

Resources  

Individual Support 

• UK Government have collated resources on Help for Households. 
• Energy Bills Support Scheme from UK Government. £400 off energy bills for households in Great Britain from this October. This automatic, non-repayable discount will be applied in six instalments between October 2022 and March 2023 to help households through winter. There is no need to apply for the scheme and you will not be asked for your bank details.
• The Scottish Government have collated resources on the cost of living crisis.
• If you receive tax credits or benefits you may be entitled to an extra cost of living payment (UK Government).
• Turn2Us is a national UK charity providing practical help to people who are struggling financially. 
• Citizen Advice have collated resources for households navigating the cost of living crisis.
• Martin Lewis’ Money Saving Experts website is a trusted source with advice and tips on entitlements and how to save money.
• Mental Health Support: We Are Here Scotland have collated a Mental Health & Wellbeing resource list.

Advice for Craft Businesses  

• Check your business energy bills are accurate. If you are struggling to pay your business energy bills, refer to Citizen Advice.
• Recover any unpaid invoices. Refer to The Illustrated Freelance Guide written by Heather Parry and illustrated by Maria Stoian.
• Get paid fairly. Refer to the Scottish Artist Union Rates of Pay when setting rates and before finalising contracts.
• Review your business and map out areas of risk in terms of cost of living impacts. Could you diversify your supply chain or combine purchasing power with other makers?  
• Apply for grants. There are a number of grants and awards available that may support research and development into more sustainable and cost-effective ways of running a craft business:  
  • Creative Scotland – Open Project Fund. Apply up to £100,000. You can apply for a range of project costs within this including marketing and capital costs. Creative Scotland are happy to provide advice to potential applicants (Open all year round).
  • Inches Carr Awards, supported by Craft Scotland (Closes 5pm, Tue 1 Nov 2022).
  • The Emergency Art Workers Support Fund (EAWSF) (Closes Midnight, Fri 11 Nov 2022).

Consumers of Craft  

In recent years, we have seen a growing UK audience for contemporary craft alongside a DIY boom that has seen the rise of craft workshop attendees.  

However, we now know that the cost of living crisis is affecting consumer habits, many are reducing their discretionary spending in the face of rising costs for everyday essentials (food, energy and petrol). Attendance at cultural activities is also expected to be lower than pre-pandemic levels (The Audience Agency).  

In the recent WGSN webinar “WGSN Live: Strategies for Recession Resilience” their forecasting experts recommended that businesses should communicate any cost rises to their customers and take the time to explain that there may be supply chain issues for example. Customers are looking for transparency from the business they choose to engage with.  

WGSN also stressed that it was important for businesses to communicate the value of their products, what makes them special and how they add to customers' quality of life. During times of economic downturn customers turn to ‘little luxuries’ as shown in the Lipstick Effect. WGSN emphasised that consumers will continue to be focused on sustainability, home interiors, nature and wellness. These shopping trends resonate with contemporary craft and highlight there is still a desire for handmade objects made from natural materials.  

Craft Organisations   

The UK Government is conducting a 3-month review of the Energy Bill Relief Scheme, to inform decisions about the future of the scheme following the conclusion of the initial 6-month period of support (31 March 2023). As ever information is needed quickly to be part of influencing decisions.

The Department for Business, Energy & Industrial Strategy (BEIS) has now issued a survey for individual organisations to inform the outcome of the 3-month review of the Energy Bill Relief Scheme.

The survey asks for individual firm-level details on their energy usage. The deadline is Midnight, Sunday 30 October 2022.

We are keen that the craft sector is well-represented in talks about the review and would like to encourage you to complete the survey. 

This article is for information purposes only. The content is not intended to be a substitute for professional or legal advice. Always seek the advice of your local authority, trade union, the Scottish Government or the UK Government on matters relating to the cost of living crisis.

Photography by StellrWeb on Unsplash