MPs on the Public Accounts Committee have warned that festivals will not survive without a "government-backed insurance indemnity package".
The parliamentary group's report on the Department For Digital, Culture, Media and Sport's Covid 19: Culture Recovery Fund signed out live music events as being at risk.
"This year there is also a survival threat to festivals without a government-backed insurance indemnity package against the risk of cancellation," the MPs wrote on their eighth report on the issue.
"Although the Department expresses confidence that the Culture Recovery Fund provides value for money, it is vague about how it knows this to be the case. Its evaluation of the programme during 2021 gives it an opportunity to learn and apply the lessons to its future oversight of the sector, including a fresh look at the challenges the sector faces and how best the Department can support the sector’s creative and economic potential in the future."
MPs suggested that a lack of knowledge on the festival sector was behind Department for Digital, Culture, Media and Sport's failure to act.
"Department has only partial knowledge about the fund’s impact on freelancers, commercial organisations, supply-chain businesses and festivals," they argued.
"Festivals are making difficult decisions about whether to risk their survival by going ahead this summer, but the Department has not modelled the cost of underwriting festival indemnity insurance."
The committee said it had challenged the government on "what the obstacles were to setting up a Government-backed insurance scheme for live events" but it "could not update us about any change in policy, but said it was conscious of the issues and had been listening to the sector on an ongoing basis and that it was for ministers in discussion with HM Treasury to decide how to prioritise public funding to support the sector. The Department told us it had not modelled the cost of underwriting of festival indemnity insurance."