Geoffrey Macnab examines the possible reasons for the government’s planned shutdown of the UK Film Council; and looks at what the future might hold.

Lord Puttnam isn’t generally given to understatement but his remark that the DCMS decision to abolish the UK Film Council “will take some time to digest fully” doesn’t even begin to capture the shock the decision has caused. The entire UK industry has been blindsided by Monday’s news, which came utterly out of the blue.

Two key questions have been asked this week: why has this happened and what will it mean?

Jeremy Hunt, Culture Secretary in the new coalition Government, talked about “improving efficiency and cutting costs.” He referred disapprovingly to UKFC’s hefty overheads of £3m per year. What he doesn’t seem to have realised, or has chosen to ignore, is that in the 10 years of its existence, the Film Council’s tentacles have stretched into so many corners. Pulling down the edifice so abruptly now can’t help but cause huge disruption across the UK film industry as a whole.

“It (the abolition) was pretty much on the cards when the Tories got into power that they would be fairly ruthless with things associated with film that aren’t profitable,” says producer Stephen Woolley, who runs Number 9 Films with Liz Karlsen. “There has never been an acceptance of cinema being anything other than a commercial enterprise.”

Woolley added that it’s conceivable the new Government sees UKFC as “symbolic of New Labour” and was therefore set against it.

When then-Labour Culture Minister Chris Smith oversaw the creation of the UK Film Council in 2000, the goal wasn’t just efficiency and coherence – creating one centralized film agency that could represent the industry to the Government and the Government to the industry. It was also (Smith claimed) to bring together “the artistic side of British filmmaking together with the more commercial side…so that each could usefully feed off each other.”

The Lottery-backed production funds were one part of a much bigger overall vision for public film policy. “We want to make some sensible, serious contribution to the development of the British film industry rather than the piecemeal, by and large slightly ineffective measures which have gone before,” chief executive John Woodward said at UKFC’s inception.

As the Film Council was ushered into existence by New Labour, British Screen, The European CoProduction Fund (which British Screen administered) and the British Film Institute’s production arm were all phased out. The Film Council took over the investment duties of the (heavily criticised) film lottery department at the Arts Council. In certain quarters, there is still considerable bitterness over the manner in which these older agencies were dismantled to make way for the Film Council. Ten years on, many British producers continue to feel that the UKFC could have done more to help them retain rights, negotiate better recoupment corridors and therebystrengthen their companies.

This was one reason why PACT’s reaction this week to the news of UKFC’s abolition was relatively restrained with Chief-Executive John McVay welcoming the coalition Government’s continuing commitment to lottery funding and the tax credit rather than focusing on UKFC’s plight.

Once they had overcome their initial shock and disbelief at the decision to close UKFC by 2012, other UK industry figures have also turned their attentions to the most pressing question: whether they will be able to safeguard current levels of public investment in UK film.

In a letter to The Guardian, Directors UK, chaired by Charles Sturridge, called for “an effective environment” in which Government support could work, “with no return to the chaos of the 1990s with its conflicting bodies and departments and no single voice for the industry.”

This week’s DCMS Statement stated explicitly that Government and Lottery support for film would continue. What it didn’t provide was any detail of how this support would be disbursed.

The DCMS talked about “establishing a direct and less bureaucratic relationship with the British Film Institute.”

Did this mean that the BFI would be the vehicle through which lottery production support would be invested?

Many observers have noted that the new merged UKFC Production Fund under Tanya Seghatchian seemed to have a similar footprint to that of the old BFI Production Board. The BFI is clearly happy that it will now have a direct relationship with Government “alongside other national cultural bodies.” There has been speculation about the role BFI Chair Greg Dyke may have played behind the scenes in engineering a situation which seems to be to the BFI’s long-term advantage. BFI sources won’t comment on this although one did call Dyke “our secret weapon.”

The irony from the BFI perspective is that it’s only a month since an earlier DCMS Statement announcing the withdrawal of funding from the Institute’s long dreamed of National Film Centre.

Will the Institute now welcome being involved in Lottery production funding? This is far from clear. BFI representatives have been talking recently of their desire to be seen as a cultural rather than as an industry body. However, there is nothing in the BFI charter that would prevent it from taking on such a role.

No matter what the future holds, there was clearly little consultation over the decision to dismantle UKFC. What worries industry sources is that this is policy made on the hoof, without analysis or understanding of the effect it might have.

“I’ve sat on some of those multi-party assessments of the industry where you get MPs from across both houses. They’re pretty ignorant when it comes the business. They make blanket statements about things they can never back up,” notes Woolley.

Paul Trijbits of Ruby Films told Screen on Monday: “This is literally a bolt from the blue for everybody in the industry, including the UK Film Council. There has been no consultation, no evaluation, very little consideration of how to take forward the different parts that the film industry does. The (DCMS) statement begs many more questions than it answers.”

Meanwhile, a Facebook campaign has been launched to show support for the UKFC, and followers are joining in droves (the current tally stands at more than 25,000 followers). The Film Council has not always engendered huge amounts of affection in the industry. Disgruntled producers who’ve had their projects turned down and critics who’ve objected to what they perceive as its top-heavy bureaucracy have been taking potshots at it consistently for almost as long as it exists. However, UKFC sources say they’ve been “bombarded with support” since the DCMS decision was announced on Monday.

They’re in “fighting spirits” and are clearly hoping that a grassroots BBC Radio 6-style campaign may still save the organisation.

In the short-term, UKFC is expected to honour its funding commitments. It’s conceivable there may even be new rounds of production and development funding before the closure set for spring 2012. “Clearly the difficulty within that is that once an organisation knows it is going to come to an end, yes the money is still there but the people might not be,” noted one UKFC spokesperson.

The suspicion remains that the decision to axe UKFC was taken in kneejerk fashion without provisions for the future. As one UKFC source states, “this decision was taken at the end of last week for purely political reasons…they (the Government) clearly don’t have a clue about the hornet’s nest they’ve just opened.”