Senior UK industry figures are strongly supporting a new mandatory training levy on producers proposed by Skillset and government, despite criticism from some producers.

The Government is in the process of creating an industry training board (ITB), which will be able to impose a compulsory training levy on film-making.

It will replace the current voluntary levyfor film-makers - the Skills Investment Fund (Sif), collected by Skillset - which represents 0.5% of a
film's production budget.

'Since the SIF was set up in 1999, thousands of people have benefited
from the investment in training that this current voluntary levy has
afforded,' said Stewart Till, Deputy Chair of Skillset.

'Training is the industry's lifeblood, and is vital for our future competitive advantage in the global marketplace. The UK's film industry is leading the way with a national skills strategy, and the introduction of a mandatory levy to support it.

'This has generated goodwill from government, and has enabled us to leverage additional money from the National Lottery through the UK Film Council to roll out training across all parts of the industry.'

Iain Smith, OBE, Producer and Chair of the Film Skills Strategy Committee, pointed out that since 2003 informal and formal consultations have taken place with industry representative bodies who indicated their support for the currently voluntary levy to move to a mandatory levy.

65% of all films approached currently pay the SIF and all productions receiving public funding are already obliged to pay.

'The new levy signals a bold move by the industry,' said Smith. 'The Board of the new ITB, who will be industry representatives, will consider all comments from the previous consultation process.

Currently there is no minimum exclusion threshold for paying the SIF. The ITB Board will set the new levy and threshold rates based on further consultation with the industry.'

Industry concerns

However, some in the industry are saying they were not aware that the levy was shortly to be made compulsory on all British films.

'There hasn't really been widespread consultation,' commented Abigail
Payne of law firm, Harbottle and Lewis.

'There doesn't seem to have been a lot of publicity.' She said that many of her film producer clients were unaware of the proposals for the mandatory levy.

'I was only made aware a few days ago that this is upon us,' said Mike Downey, co-founder of Film and Music Entertainment.

Others have expressed the same concerns off the record.

But Skillset representatives insist that the plans for the new levy has been flagged up properly to the UK industry. It launched an informal consultation with industry producers in 2003 and 2004.

This sought the views of over 300 individuals (includingproducers, line producers production accountants, production company heads, regional and National Screen Agencies), and responses to this were overwhelmingly positive.

This was then followed by a formal consultation by the government Department for Innovation, Universities and Skills (or DfES as it was then).

Producers organisation PACT says that its members were fully consulted and the final response was formally agreed by both the Film Policy Group and the Skills Policy Group.

However, at the time (2005), Pact proposed:

  • The levy should not apply to films with budgets below
  • Thereshould be a lower percentage for budgets under £5m
  • The levyshould be phased in 'to avoid harming a fragile industry'
  • The cap should be raised to avoid lower budget films contributing

Some observers are now suggesting that the levy will be 'very hard to police' and are questioning how it will apply to international co productions involving the UK.

Skillset stated that it will be up to the ITB Board to to set the levy rates and define which films will be in scope to pay the levy.

It is anticipated that there will be a threshold budget level - so films below a certain budget level will be exempt from paying the levy. This will be decided by the Board in consultation with the industry.

A UK Film Council spokesperson is strongly supportive of the new mandatory levy.

'The overwhelming consensus is that a mandatory levy is the way to go,' a UKFC spokesperson said in a statement.

'The industry has been widely consulted about this issue and it was agreed that everyone should contribute given the heavy reliance on skills.

'Productions below a certain level will be exempt from paying the levy yet will still benefit from the training it pays for. Putting this levy on a
mandatory basis is the right way forward because it ensures that
funding for skills and training is sustain.'

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