How will budget cuts and a new chairman impact on the UK industry?
These are turbulent and contradictory times for the UK production sector and the UK Film Council (UKFC). The British film industry is enjoying a mini golden age, winning Oscars and increasing its market share at home and abroad. However, the UKFC is now confronted with a 15% ($33m) cut in its lottery funding over the next five years, thanks to the cost of the 2012 London Olympics. The UKFC is also now in the throes of appointing a new chairman, as Stewart Till will be stepping down in the summer. Within the next year, the UKFC - an organisation set up in 2000 by then culture secretary Chris Smith at a buoyant moment for New Labour - may well have to adjust to life under a new Conservative government.
The decision about how the cuts will be implemented will not be made until the new chairman is in place and the UKFC draws up its next three-year spending plan. However, this is a transitional moment for the huge, government-supported film agency. Has it delivered what it promised nine years ago, when the mantra was about “building a sustainable British film industry”?
“The British film industry is a work in progress and the Film Council is a work in progress, but I think we have definitely shifted the landscape,” claims UKFC chief executive John Woodward. “The depth of engagement with the industry is wider and deeper than it was by a very long way.”
Citing films from Robert Altman’s Gosford Park to James Marsh’s Man On Wire, Woodward argues the UKFC has “been a very, very strong force for good for the quality of film output and our film culture”. He also contends the UKFC has succeeded in making sure “film is at the centre of government policy”.
Woodward acknowledges some of the UKFC’s policies and initiatives “are getting on for a decade old. What may have been right for the first eight or nine years - is that right for the next two or three years?”
It is a measure of how integral UKFC production funding has become to the UK industry that the prospect of reductions to its funds’ coffers is greeted by leading UK producers with dismay.
“It’s extraordinary at a time when we’ve had our best Oscars ever that there is this apparent consideration of a reduction in the funding for film,” says Douglas Rae, managing director of Ecosse Films. “British film is in a position to use the energy and success we had at the Oscars to move on to a world stage rather than a provincial domestic stage. It seems very short-sighted for money to be taken from funding at this time.”
Rae’s remarks are echoed by Jane Wright, general manager at BBC Films. “What has happened over the time that the UK Film Council has been in place is that there has been a real focus on quality,” she suggests. “It has brought in dividends. I’m told by sales agents we work with that UK product is moving better than any other product. Why? Because we have a history now of a solid background of success.”
Paul Grindey, head of business affairs, scripted content at Channel 4, makes the point that the UKFC, alongside BBC Films and Film4, is now one of the lynchpins of UK film production.
“The film industry is wrestling with a number of structural and systemic problems, including weak pre-sale markets, scarcity of credit and uncertainty as to the evolution of the distribution model,” Grindey notes. “Alongside that of Film4 and BBC Films, the UKFC’s production funding is essential to help UK producers build finance plans and to mitigate some of these difficulties. Any threat to the UKFC’s production funds is a threat to the UK film industry as a whole.”
But given the UKFC’s original aim of creating a sustainable film industry, it is arguable the present instability and reliance on the Film Council’s own production funds shows it has fallen short of this goal. Additionally, many producers criticise the UKFC’s failure to address the decline in international co-productions since the new UK tax credit was introduced two years ago.
“Look at the British film industry as opposed to nine or 10 years ago and ask, is it stronger or weaker?” Woodward responds. “I don’t think you have to be a rocket scientist to agree it’s a lot stronger.”
He argues the production sector is “more sustainable” than it was a decade ago. “To a degree, that has been through the support of the Film Council - through the consistent funding of development and the best projects. Primarily, the production sector survives on its own talents and the Film Council’s role is to support that endeavour, not to be the production sector or organise the production sector.”
There is a consensus the Film Council has been successful in one of its key objectives - namely shaking up the way lottery money is invested in UK film production. Prior to the creation of the UKFC in 2000, this was done in haphazard fashion, through the lottery franchise system and one-off investments by the Arts Council of England’s lottery department.
The UKFC is broadly on track in terms of its recoupment targets on production, although these have begun to dip lately. It has received approximately $36.1m (£25m) a year in lottery money - $324.7m (£225m) to the present day - and says it has recouped $108.1m (£75m) in total to date. The UKFC board, which is appointed by and answerable to the Department for Culture, Media and Sport, asks for a 25% return on New Cinema Fund investments, rising to 50% for Premiere Fund investments.
“(The recoupment targets) have been slipping consistently over the last year or two which is a direct reflection of market conditions,” Woodward says, pointing out the UKFC has taken a less aggressive recoupment position in the last year or so in order to get films made.
Woodward concedes some of the more rosy statistics bandied about (for example, Stewart Till’s recent observation that “around the world, 15% of all films watched were British”) need contextualisation: “That would undoubtedly include inward investment films - the Harry Potters and James Bonds.” Woodward argues the UKFC can take some responsibility for attracting these films to the UK.
One of the UK’s most senior producers, Jeremy Thomas, highlights a paradox at the heart of government policy towards the British film industry. On the one hand, there is huge emphasis on training and media education (the UKFC invests $9.4m (£6.5m) in the Film Skills Fund). At the same time, it is becoming harder to finance and make films. “(The government) should stop the media education and stop wasting the money if they are not going to make it possible for people to make films,” says Thomas.
Any organisation facing cuts of this size will be forced to look at its own overheads. And many argue the UKFC’s $13.1m (£9.1m) running costs are ripe for trimming. A leading UK producer suggests the UKFC personnel ratio (it employs 90 staff) to the number of films it gets made “needs looking at”. Seven staffers are paid more than $144,000 (£100,000) per annum and Woodward, who has been at the UKFC since its inception, joining from producers’ association Pact, and is seven months into a new three-year contract, earns more than $288,000 (£200,000).
“The only executives who have limited tenure at the UKFC are the heads of funds and that’s because they’re exercising taste and judgment on particular films and film projects,” says Woodward. “There is a very strong view from the production sector that those jobs, in terms of the powers they wield, should be rotated regularly.”
He argues the UKFC salaries, when compared to those of commissioning editors at Channel 4, ITV or the BBC, are “almost certainly not out of kilter”. Till also defends pay levels. “For the Film Council to be effective, we have to recruit the best executives … to get people of that level, you’ve got to pay them, if not the full salary they’d get in the private sector, at least close to those salaries.”
Till also argues it would be very surprising if a new government demanded a complete overhaul of the UKFC. “There’s a sense across the political spectrum the Film Council has been value for money,” he says.
One obvious way in which savings could be made is by sharing services with sister organisation, the British Film Institute (BFI), whose grant-in-aid of $23.1m (£16m) is administered by the UKFC. The BFI is lobbying hard for its ‘National Film Centre,’ a hugely ambitious $231.1m (£160m) new home. Plans for the Film Centre have made no allowance for sharing premises with the UKFC but rumours of increasing overlap between the two organisations persist. “Something is going to shift. I don’t think that the landscape as far as that relationship is concerned is necessarily going to stay the same,” a BFI spokesperson comments. Woodward points out that all public organisations are being asked to look at shared services in areas such as finance and human resources departments.
Waiting in the wings
Among the names vying for the position of new UKFC chairman, which is part time and unpaid but carries enormous influence, is Working Title co-founder Tim Bevan. If he is appointed, Bevan is expected to shake things up dramatically.
“You want someone who can come in as the new chair and, working with a very powerful board and strong management team, move (the UKFC) on a step,” Till says. He contends that piracy remains the biggest challenge for the British film industry “by a country mile” and that the new chair must continue to work with the UK government to overcome it. “That’s so big, it dwarves everything else.”
The UKFC has undoubtedly presided over a sustained period of success for the British film industry. As Till says, in spite of the “incredibly difficult times”, the British film industry is in “the best shape in living memory”. However, that does not mean the UKFC is not ripe for renewal. As Jeremy Thomas puts it: “Every organisation is enhanced by movement of new blood in it.”