Direct response unit

The UK Film Council’s three-year plan for 2010 to 2013 was designed for the most part to respond to the needs of an industry, which like Hollywood and all other local industries, is unclear how to generate new revenues to replace the fast dwindling current ones in the existing financing model.

And while UKFC chief executive John Woodward trumpets, as he must, the fact that the level of UK independent production in 2009 was not down on 2008 and the box office is buoyant, he also makes no bones about the ­feeling of what he deems “uncertainty” which has fallen over the industry like a shroud.

Nor was the UKFC’s task of responding to this limbo period of bank withdrawals from the sector, plummeting international sales estimates and diminishing private investment made any easier by the government’s demands that the organisation lose $38m (￡25m) from its budget in the next three years to divert to the Olympics budget.

Refocusing

The resulting plan, however, might have given the UKFC a valuable focus that had perhaps been diluted through multiple initiatives over the decade since it was founded under Woodward in 2000.

“We got rid of a number of things which were nice to do but in the cold hard reality of having less money, we just couldn’t do any more,” explains Woodward.

“There was a big festival fund and a digital archive fund which have both gone. We cut the Skillset budget by half, and we took the p&a fund down from $6.1m (￡4m) to $3.1m (￡2m), although from now on we put any recoupment from p&a right back into the fund.”

What emerged very clearly as a result of the cuts, the industry crisis and an extensive consultation process with the industry was that the UKFC had to protect and refine its production funding.

“There is not much point being the Film Council if you are not helping the film-makers get the films made,” Woodward says. “So having said that we would put a minimum of $22.9m (￡15m) into production, and recoupment straight back in, which should quickly bring it up to $24.4m (￡16m) or $25.9m (￡17m), a lot of things fell into place.”

Woodward, his chairman Tim Bevan and board member Barbara Broccoli spearheaded a selection process which has resulted in the fund being run by Tanya Seghatchian with three executives ― Chris Collins, Lizzie Francke and Natascha Wharton ― under her.

The industry response to the news of a single fund and the four executives has been positive, especially since the funding decisions will be made “by ­consensus” in an attempt to avoid the subjective choices of past funds.

“We have hired Tanya and the three executives because we know they are going to work in a sensible and collegiate way,” says Woodward, who admits that the “proof of the pudding will be in the eating”.

 “Although Tanya is the boss and every­thing has to be signed off by her, the fund decisions won’t just be Tanya’s in the way that the Premiere Fund or New Cinema Fund worked before with their heads,” he says.

The harsh realities of the business have refocused the fund to “help low-budget British films when raising the money for anything of ambition is becoming harder and harder”.

Woodward says the Film Council doesn’t need to continue the work of the Premiere Fund which aimed to stimulate mainstream film production.

“One of the things we’ve helped do over 10 years is grow the film industry,”

he says. “Film in the UK is at a point where for those types of commercial films there are still ways of getting the finance. I don’t see it as the Film Council’s role to be a film bank for commercial ­movies.

“The Film Council has to be the home for creative excellence and real originality and that is the area in which the private sector is increasingly risk-averse. You can see it in the specialty arms of the studios, you can see it in the UK with private sector investors who want to play it increasingly safe in casting, story and working with new talent. That is where we have a role.”

Sustainability and innovation

The problem still exists, of course, in the UK that there is a severe shortage of market-driven independent production centres like Bevan’s Working Title which have the resources to develop film-makers and slates of films employing a breadth of UK talent.

The Film Council is launching a think tank under Bevan to explore policy proposals that could help build sustainable independent film companies of scale in the UK. Producers association Pact has its own ideas on the matter which will be made public in a report later this month.

This is a tricky area, bearing in mind that the Film Council itself inherited oversight for the three Lottery film franchises at the start of its existence ― an Arts Council initiative which was ultimately perceived as a failure.

But then again, since the entire revenue stream model is undergoing a sea change, this could be a perfect time to reinvestigate. And that is where the Film Council’s new $7.6m (￡5m) Innovation Fund also comes in. A board composed of leaders in the film and innovation businesses will allot the money to areas that could include ­technological applications for the industry or new ideas for making and marketing films.

Woodward says that in the future the UKFC has plans to leverage its fund to access other public funds to support the innovation projects.

Bigger and stronger

So does Woodward think that the UK industry is in good shape, bearing in mind the troubling market conditions? “It is a lot bigger and stronger than it was 10 years ago,” he asserts. “There is a very sophisticated private sector investment structure which is underpinned by the tax break which we re-engineered four years ago.

“We got rid of sale and leaseback and provided a solid business block there which isn’t about anyone making decisions but will provide you with up to 19% of your budget in the UK. And we have contributed to building a reputation that the Brits can make commercial films and do them well.”

Woodward is also proud of the fact that under his leadership, the message has been received loud and clear in all the political parties about the value of film to the nation. “I am pleased with the level of commitment from the Labour government to the film industry,” he says.

“What I am even more pleased about, frankly, is that whoever gets elected in the next election [on May 6], whether it is Labour or Conservative or a coalition, the Film Council has done a sound job of making sure that film is perceived as a premium part of the creative industries’ offer inside government and that whoever is going to run the country is going to be supportive of the film industry. That wasn’t the case 10 years ago.”

The three-year plan is largely safe from a possible change in government in May, especially the funding that is supplied by National Lottery money.

The danger, says Woodward, is to the  $40m (£26.2m) grant-in-aid funding that comes to the UKFC from the ­Treasury via the Department for ­Culture, Media and Sport (DCMS) and which goes principally to the British Film Institute $24.4m (£16m) and the regional screen agencies $9.6m (£6.3m).

“The big question after the election is how much money we have got to play with on the grant side, how much will they chop off the line which says film,” warns Woodward, himself former director of the BFI from 1998-99. “The BFI is a possible area under threat and we have to fight that battle.”

The negotiations about the merger between the 10-year-old Film Council and the BFI, which is an 80-year-old Royal Charter body, have been going on for six months at the initiative of the DCMS, and are continuing.

Where the money will go

Planned annual expenditure of UKFC 2010-13 (category amount; percentage of spend)

BFI £16m; 25.8%

Film Fund £15m; 24.3%

Screen Agencies £6.3m; 10.2%

Operations (grant award administration, application support and monitoring and evaluation & organisational costs) ￡6.094m; 9.9%*

Innovation Fund £5m; 8.1%

Film Skills Fund £3.25m; 5.3%

Distribution & exhibition £2m; 3.2%

FILMCLUB £1.533m; 2.5%

Strategy, research, statistics and market intelligence, publications £1.233m; 2%

First Light £1.1m; 1.8%

Irish Language Broadcast Fund £1m; 1.6%

Office Of The British Film Commissioner £0.8m; 1.3%

Film exports £0.5m; 0.8%

Diversity and inclusion £0.36m; 0.6%

International support (MEDIA Desk UK and other activities) £0.358m; 0.6%

UKFC capital items £0.3m; 0.5% Sponsorship (film awards) £0.3m; 0.5%

Intellectual property and combating film theft £0.25m; 0.4%

Certification (of British films & TV programmes) £0.159m; 0.3%

Cross art-form venues £0.1m 0.2%

Co-production £0.083m 0.1%

Total £61.72m 100%

* The UKFC employs 75 people and overhead cost, which is included under operations costs, amounts to £3m.

Source: UKFC