Production spend across the UK’s film, high-end TV, video games, animation and children’s TV sector generated an economic contribution to the UK economy of £7.9 billion ($10.3bn) in 2016, the most recent year for which full figures are available, according to a new report commissioned by the BFI.
‘Screen Business: how tax incentives help power economic growth across the UK’ attributed the UK tax reliefs with powering the extraordinary level of growth across the screen sectors.
In his foreword to the report, UK chancellor Philip Hammond noted in 2017 alone “over £850 million of [tax relief] support was provided - and since the reliefs were introduced they have benefited 2,420 films, 310 high-end TV programmes, 480 video game productions, 145 animation productions and 75 children’s TV programmes.” The net result, Hammond added, was “tens of thousands of jobs” have been supported, contributing “billions of pounds to the UK economy.”
The UK’s film tax relief (FTR) was created in 2007 and is credited with kickstarting the years of growth. Between 2012 and 2016, Gross Value Added (GVA) in UK film increased by 91%. Without the tax reliefs, the report calculated the film sector would have been “half the size of what it was in 2016”.
In high-end TV, the growth has been even steeper since the introduction of tax relief in 2013, with GVA up 149% between 2013 and 2016, said the report.
In addition to analysis of the tax reliefs the report also looked at the investments made by distributors, broadcasters, video games, publishers and the US studios in the UK.
It also assessed the “supply chain” impact and the “spill-over impact” of activities including in-bound tourism, merchandise sales and the “promotion of the UK brand.”
For the first time, the analysis also assessed the impact of the tax reliefs on the visual effects sector.
£1.7bn film spend in 2016
The report claims an estimated £632m in tax relief seeded £3.2bn in direct production spend in 2016, a 17% increase on 2015. Growth in production investment across all the sectors has leapt up from £1.7bn in 2013 to £2.3bn in 2014, £2.5bn in 2015, finally to £3.2bn figure for 2016. (Film is responsible for £1.7bn of the 2016 figure.)
Production spend which would not take place without the tax reliefs, known as ‘additionality’, was assessed as being at £4.1 billion in 2016. Over 137,000 full-time equivalent jobs (FTEs) were generated by tax-relief supported screen production in 2016.
The report was produced by London-based analysts Olsberg SPI with Nordicity, and commissioned by the BFI, with the British Film Commission (BFC), Pact, Pinewood Group, UK Interactive (Ukie), the UK Screen Alliance and Animation UK.
SPI chairman Jonathan Olsberg pointed to the “four key areas” where the impact of the reliefs can be felt: growth, employment, the competitiveness of the creativity industries and their capacity for innovation.
“We looked and saw that in all of the sectors, the productivity per FTE has been higher than the national average,” said Olsberg at a BFI briefing in advance of the release of the report. “Let’s remember that that these jobs represent the jobs of the future. These are not jobs that are going to be as under threat from AI and from robotics as other sectors. These are jobs in the creative sector that we think are going to be protected from those developments and therefore have even greater value than you can see on the page.”
“There is no evidence at all that there is any other country that has delivered the impact in terms of growth and just the breadth that this suite of incentives delivered (in the UK),” Olsberg added.
The full report can be accessed here. www.bfi.org.uk/screenbusiness
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