Budget boost for creative industries
Creative industries pledged skills and innovation funding, support for VFX industries; corporation tax reduced, support for SMEs.
While the UK’s economy will grow by only 0.6% in 2013 - half the rate forecast three months ago - there were warm words for the creative industries during Chancellor George Osborne’s budget speech.
The Chancellor confirmed the previously announced tax credit for high end TV, animation and games.
In new developments, funding for the Skills Investment Fund (SIF) will be increased to £8m ($12.1m) annually over the next two years, with Government match-funding voluntary industry contributions to support skills development and training in the digital content sectors, including the VFX industries. That is up from £3m ($4.5m) announced in December.
At last week’s BSAC conference in London, some industry executives raised concerns that the UK’s current skills base might not be able to fully service a potential influx of TV productions prompted by the introduction of the TV tax credit, so today’s announcement should incentivize industry to develop more training initiatives.
£15m digital support
Also announced in the Budget was that the Technology Strategy Board (TSB) will design and launch a new competition of up to £15m ($22.75m), effective immediately, inviting consortia bids to support digital content production through partnerships with industry, including specialist SME’s, educational research facilities and training providers.
In other significant developments designed to stimulate growth, which will impact the creative industries, corporation tax will drop from 28% to 24% in April, and from 24% to 21% in 2014.
The Government will also launch a £300m ($455m) investment scheme in the spring “to help diversify and expand the supply of lending to SMEs and mid-sized businesses”.
As announced in January, £30m ($45.5m) additional funding has been earmarked to expand the Start Up Loans scheme with an increase of the age limit to 30, up from 24.
The Government also announced that it will launch a public consultation this summer on options to provide further support for the visual effects (VFX) industry through the tax system.
Screen understands that the most likely way to do this will be to extend the cash rebate of films budgeted above £20m ($30.3m) to 25% from the current 20%.
Only films budgeted below £20m currently qualify for the 25% rebate.
Tax avoidance pledge
Finally, the government renewed pledges to come down hard on tax avoidance schemes, with further threats of naming and shaming such schemes.
With regards to the skills and VFX support, Alex Hope, managing director and co-founder of Double Negative, co-author of the ‘Next Gen’ Report and Creative Skillset Board member said: “The Government’s recognition of the content production centre and visual effects’ position within that is hugely welcome.
“The measures announced today offer significant opportunity to drive this sector forward and invest in our greatest asset - the tremendous talent existent in the UK.”
Stephen Garrett, chairman of Kudos, executive chairman of Shine Pictures and Creative Skillset Board member added: “The UK Creative Industries are renowned for having a world-beating skills base.
“A new challenge is making sure that we can boost growth and properly resource increased levels of production so that we compete even more successfully on the global stage.
“It is fantastic to see today’s additional financial commitment from the Chancellor to support the skills and talent development we need to help our industries step up to this challenge.”