National Audit Office report on Investigation into the UNBOXED festival

An investigation into the UNBOXED festival by the National Audit Office found that audience engagement was lower than originally modelled, although the project was delivered on time and is forecast to be on budget. 

The NAO report into the £120 million programme of events, which was intended as a celebration of creativity and innovation across the United Kingdom, found:  

• At the time of reporting, final cost and audience engagement data were not yet available. In November 2022, Festival 2022 Ltd reported that 18.1 million people had engaged with the festival. The NAO did not examine as part of its investigation how audience engagement is recorded and monitored.

• According to Festival 2022 Ltd's figures, as at November this year, the festival as a whole had met its audience targets set earlier in 2022. 
• However, the total of these project targets was lower than the audience engagement figures modelled by DCMS in 2021 when it approved the business case for the festival.  

Festival 2022 Ltd has commissioned an evaluation of the festival which will report in early 2023. Following its investigation1, the NAO has concluded that this evaluation should be published in the interests of transparency and include information to allow DCMS and Festival 2022 Ltd to fully understand the volume and nature of participation for each project alongside the final cost. The evaluation should also identify lessons for the future from the experience of how projects have performed against their targets, and about the importance of agreeing clear objectives and setting performance targets early enough in any similar future programme's lifecycle2.   

Reaching 66 million people, as has been widely reported, was never a formal target for the festival. From Autumn 2019, the stated vision for the festival was for it to reach millions of people. Although described as a "stretch target" by DCMS in evidence to the Digital, Culture, Media, and Sport Committee in November 2021, DCMS and Festival 2022 Ltd told the NAO that the 66 million was not a formal target but was intended to be a creative device to encourage ambitious and innovative thinking from those interested in delivering one of the ten events. 

DCMS obtained final approval of the business case3 for the festival from HM Treasury more than a year later than planned as a result of COVID-19. It had originally estimated financial benefits of £170 million. However, its business case did not take into consideration the costs that would be incurred by the devolved administrations, including their three projects4.     

A substantial amount of the project's total budget of £120 million - up to £19 million - was no longer available to deliver the festival due to irrecoverable VAT. DCMS had originally assumed VAT would be recoverable. 

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Notes for Editors     

1. The investigation covered a number of areas, including the set-up, funding, and delivery of the festival. It also set out the facts about DCMS' management and oversight of the festival, as well as the outturns achieved against DCMS expectations.  

2. The NAO did not report on the achievement of the benefits expected from the festival as this will be covered by the UK-wide evaluation of the festival in early 2023, which is being commissioned by Festival 2022 Ltd - the company tasked with delivering the programme of events - and supported by DCMS. As part of the audit, the NAO did not examine the initial decision taken in 2018 to hold a festival and did not draw a conclusion on the value for money of the festival, as this would require the results of next year's evaluation.  

3. In its full business case, DCMS estimated the financial benefits of the festival at £170 million, with a best-case scenario of £493 million and a worst-case scenario of £40 million. Although these figures included the financial benefits arising from tourism and volunteering, they also depended heavily on DCMS modelling of audience engagement.   

4. In line with standard government practice, DCMS prepared both outline and full business cases for the festival as it progressed and sought HMT approval of these. DCMS's Finance Committee first gave conditional approval to the outline business case for the festival in September 2019. DCMS subsequently revised this case, adding more detail to the vision, preferred delivery model and costs. The Finance Committee gave unconditional approval in March 2020, and DCMS obtained HMT approval in April 2021. DCMS then worked on the full business case, for which it obtained final HMT approval in November 2021. DCMS had originally intended to obtain approval for this business case more than a year earlier in summer 2020.