The arts, culture and heritage sectors suffered a 60% decline in output due to the pandemic restrictions with a “catastrophic effect” on the lives of those involved, particularly freelancers, according to a new report.

Around 55% of jobs – 450,000 people – were furloughed in the sector, which was second only to hospitality and well above the national average of 16%, according to the study commissioned by the University of Sheffield.

More than 80,000 claims were made under the Self-Employment Income Support Scheme (SEISS) by people in the arts, culture and heritage sector and output in the sector saw a real terms decline of around one third from the second quarter of 2019 to the second quarter of 2020, it found.

The report said that activities including cinema, performing arts, museums and historical sites were the worst-hit, while others, including computer games, software, book publishing, TV broadcasting and libraries, were less badly affected.

The university’s study focused on the impact of the pandemic on the cultural industries in South Yorkshire, but put this in the context of the wider national picture.

Its focus on South Yorkshire revealed the huge impact the lockdowns have had on freelancers.

The survey found that 76.5% of freelancers reported that their mental wellbeing was worse since the start of lockdown with men, under-30s, and respondents with a diagnosed mental health condition experiencing even greater levels of distress.

Event crew, lighting and sound engineers reported greater worsening of mental health than respondents in other roles, with 53.8% saying that their mental health was “much worse” compared to 25.5% on average.

The research found that the sector in South Yorkshire is one of the most affected by Covid-19 across the UK with an estimated sector output loss of 22%, which is 5% more than the UK average.

The researchers said this is thought to be because South Yorkshire has the highest share of jobs in the hardest hit sub-sectors of arts, culture and heritage.

Professor Vanessa Toulmin, director of city and culture and chair in early film and popular entertainment at the University of Sheffield, said: “The Covid-19 pandemic has had a devastating impact on the UK’s arts, culture and heritage sector.

“This landmark report reveals how social distancing and lockdowns over the past 18 months have had a catastrophic effect on the finances of people who work in the sector, as well as businesses and venues.

“People have lost their jobs, businesses and venues have closed and this economic impact has severely affected the mental health and wellbeing of people who work in the sector across the UK.

“People in the sector have been losing sleep and have had much higher levels of anxiety due to how the pandemic has affected their personal finances and uncertainty about the future.”

Professor Malcolm Tait from the University of Sheffield’s department of urban studies and planning, said: “The report into the impact of Covid restrictions on the culture, arts and heritage sector, shows that it has been significantly affected, with a drop in output of around 20% compared to the whole economy of around 10% in 2020.

“This masks significant variation, however, with sectors such as arts and performance being particularly hard hit due to venue closures, whilst other sectors such as computer game design faring better.

“Some 65% of jobs in the sector were furloughed, compared to 16% nationally, and whilst growth has been experienced during 2021 and into 2022, we are yet to see a full recovery.

“Nationally, the Culture Recovery Fund and a range of other funds have been crucial to many organisations and venues staying open, though the diversity of the sector meant that some organisations and venues were not able to receive support, and freelance workers also experienced difficulties in accessing financial help.”