Indie film in crisis - and Labour's plans for the creative sector
ScreenPower: where the screen industries meet politics and power
Hello and welcome to ScreenPower: a free newsletter from the intersection of the UK’s screen industries, with Westminster and Whitehall.
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In this week’s edition…..why is UK independent film in crisis (and is it the government’s job to save it?)…..what are Labour’s plans for the creative sector…..sad news at Channel 4…..and three great British films to add to your watch list.
UK independent film - and the ‘horrible pinch point’
I spent time at the BFI’s London Film Festival last week - and despite seeing some incredible films (in the recommendations below), I picked up one common theme in conversation: the UK’s independent film sector is struggling.
That might sound strange, given how much I’ve banged on in previous editions about the UK being one of the most attractive places in the world to make films - but both things can be (and are) true. So what’s happening?
A tale of two sectors: Last year saw the highest ever combined spend on film and high-end TV production in the UK. Inward investment into film production here was £1.74 billion - a 31% increase on 2021. BUT spending on independent UK film production was DOWN 31%, at £174m.
Another stat for you: There were 263 domestic UK feature films produced in 2018. Last year there were just 100.
What actually is independent film? Good question! It’s not entirely straightforward - partly because the film value chain can be so complex. But essentially an independent film is one that doesn’t have the backing of a major US studio, e.g. Disney, Paramount, Universal. They are ‘independent’ of major studio backing - instead having to seek funding from a variety of private and public sources.
Tough slog: Normally an independent film will go on something of a journey, often over many years, with a producer working hard to cobble together investment and financial support, and shepherding the project through the highs and lows of the process.
Risky business: Ultimately it’s about risk and who bears that. A film from a new writer or director will naturally carry more risk than one from a team with a track record of success - and hence the ‘riskier’ projects find it much more difficult to secure funding. But as with any artistic endeavour, the riskiest projects can be the most interesting.
What are some examples of famous British independent films? The King’s Speech, Four Weddings, Paddington, Trainspotting, The Inbetweeners, The Imitation Game, Ab Fab The Movie, and many many others.
Those are all huge films though? Yes, but mostly a decade or more old. The King’s Speech is widely considered to be the most successful UK independent film of all time - but that was thirteen years ago.
So what’s causing the downturn? A combination of factors. The three main ones were summarised succinctly by the BFI’s CEO Ben Roberts last year: “budgets are not growing at a market rate, revenues are showing signs of stagnation and costs are escalating”.
Anita Overland is a BAFTA award winning producer of films such as In This World, and other credits such as the Iron Lady, Rush and Far From The Madding Crowd. She shares the BFI’s concerns. “Rising wages are a huge problem for the indie sector”, she tells me. “The inflation of production costs over the past few years has had a serious impact, and that is felt most acutely by the productions with smaller budgets.”
Funder uncertainty: It also doesn’t help that the three big public funders of UK independent film all have their own worries. The BFI has seen a reduction in the lottery funding it redistributes as well as a real terms cut to its core funding; the BBC is grappling with a real terms cut to its funding too (due to the licence fee freeze); and Channel 4 has just emerged from a period of prolonged uncertainty over its future and - like other PSBs - is grappling with huge market and audience changes (or “fighting for our business lives” as C4 CEO Alex Mahon recently described the collective challenge facing PSBs).
John McVay is the Chief Executive of Pact the trade association for film, TV, animation, children's and digital production companies. “Independent film is the only part of our audio-visual economy that isn’t thriving” he tells me - “and hasn’t been for well over a decade. The simple fact is that costs are up, and budgets are down”.
Isn’t it ironic: That is one of the ironies in all this - that the decline in indie film has happened while US investment into big budget film and TV in the UK has rocketed. The screen sector tax reliefs have been hugely successful - which is why films like Barbie and Indiana Jones are shot here - but many think these have actually started to crowd out independent production. In the shadow of blockbuster budgets, the indie sector has wilted - forced to compete for skilled crew, and struggling to cope with mounting costs.
Gareth Ellis-Unwin is an Academy and BAFTA award winning producer (including for The King’s Speech), and CEO of Bedlam Film Productions. He describes the “perverse intrinsic friction” of the UK’s success - that inward investment, and the UK’s status as a globally competitive production hub “actually represents a risk to our indie sector.”
Maintain the rights: Another problem is that the UK only has a handful of truly independent film production companies operating at scale. One of the factors holding back growth is control over rights: inward investors often retain control over intellectual property - but retention of IP is crucial to growing a strong base of British production companies, financially independent and culturally distinct.
So why does this matter? It matters now more than ever, for two main reasons:
First, it’s a proving ground and incubator for off-screen filmmaking talent. The UK’s screen sector workforce has its challenges, but John McVay says this is one of the major factors - alongside tax incentives - that makes the UK such an attractive place for big budget production. “We essentially provide R&D for the rest of the film sector. We train filmmakers, prepare them, and give them the space to experiment. The Americans recognise and value that - that’s why they invest”, he explains.
Second, it has huge cultural significance. Independent films have provided some of the UK’s most culturally defining moments. This is increasingly important as streamers and big studios produce more internationalised film and TV, designed to appeal to pan-regional audiences. But this matters abroad too. The global soft power landscape is now highly competitive, with countries like China, France, Japan and South Korea all upping their game. The UK’s cultural and creative output is a huge asset here - and the cultural impact of exporting distinctive British stories is longer lasting and potentially more powerful than the economic benefits. Gareth Ellis-Unwin says it’s great that huge budget movies like Barbie are shot here, and they bring many benefits, “but Barbie isn’t a British story - it does nothing for the UK PLC’s cultural brand. Unless we can also have a thriving indie sector, then we are just an empty vessel waiting for projects dreamt up in Burbank”.
That’s the other irony - that independent film is becoming more needed just at the point that it becomes less commercially viable. “We’re at a horrible pinch point”, McVay explains.
So what could be done about it? A few ideas have been floated. Last year the BFI published a report by Alma Economics proposing four measures to address the problem: 1) an “ambitious increase” in Film Tax Relief for independent film on all films up to a budget cap; 2) including print and advertising expenditure in the scope of relief for indies; 3) zero-rating VAT on cinema tickets for indie films; 4) and some sort of requirement for large streamers to invest in UK independent film. The most viable of these (in my view) is an increase in the Film Tax Relief for indie film, and is being discussed with government right now. This would be a simple amendment to the current regime, to provide enhanced relief for films with budgets from £1-15m - the ‘sweet spot’ as John McVay describes it, where funding is most difficult and where the market failure is now entrenched.
But why is this a political problem? This, for me, is the key question. I’ve spoken to a number of political figures in this space who still need to be persuaded of the case for deepening the state’s intervention in the screen sector. I do have sympathy with that view. Having worked at HM Treasury - and for a famously fiscally conservative Chancellor - I approach calls for industry handouts with a healthy dose of scepticism. So take anything I say with that slant. However, I’m going to make the case for why the Government should look at this:
They are already invested: The main sources of funding for UK indie film are all public bodies with varying degrees of proximity to the Government: the BBC, Channel 4, the BFI and HMT (through the tax relief). So the public sector or the state - in a very loose sense - is already deeply invested in this space. That might sound odd as an argument - and maybe it works both ways - but I flag it because it represents a political choice (much like public service broadcasting). If you are queasy about state involvement in the growth of the film sector, then you’re probably already uncomfortable with the status quo anyway, and would rather roll back current levels of support (let’s call that the Truss Approach). Whereas if you believe the state has a role in ensuring we have a world-leading screen sector, then you are unlikely to be uncomfortable with gold-plating that, for limited extra cost (call that the Osborne Approach!).
Light relief: On the subject of cost - for the tax reliefs at least - remember (from previous editions of ScreenPower) that they generate a return on investment - **both economic and fiscal** - in multiples of the initial cost (see the BFI’s Treasury-endorsed 2021 Screen Business report.
The Government’s tax reliefs are partly to blame: Obviously, this is a nuanced point that requires delicate handling. The screen sector reliefs are a great British success story - but as the market has grown, it has become distorted. As John McVay explains, “we have the stories and the talent - but we need the market to function in a way to allow that to thrive”.
This isn’t a zero sum game: not only can the indie sector thrive alongside big budget production, it has to thrive to continue attracting that investment. “The key to it all is that the independent film sector feeds the wider industry, i.e. HETV and Studio films”, Anita Overland tells me, “and if our industry fails, it will have an enormous knock-on effect”.
Market exposure: Recent months have demonstrated the risks for the UK’s TV and film sector of being so exposed to the US market. The writers and actors strikes there have had a significant impact on parts of our sector. Many productions have stopped, studios have been left empty, and workers have been left without pay - in a largely freelance sector with limited safety-net support. A survey for the union BECTU this month found that 80% of film and TV workers in the UK have been directly impacted by the strikes. And it’s broadly felt - the VFX sector have warned of up to 40% job losses too (h/t William Turvill). A stronger indigenous sector would help to provide a bulwark against global headwinds.
Cultural and creative soft power (as outlined above): This is the strongest argument for me. Politicians talk a good game on soft power - and the Government puts money behind marketing that power. But when it comes to generating that power by protecting our cultural assets or creating new ones, the enthusiasm in Westminster tends to wane. If soft power matters to the current or future governments (that is a big if, and one I’ll be returning to in future editions), then this is a relatively low cost opportunity to safeguard a key tool in our soft power arsenal.
A new chapter?: There have been several milestones in the relationship between the film sector and the UK government – at least in terms of financial support and incentives: the introduction of National Lottery funding for independent film in 1995; film tax relief in 1997; significant film tax relief reform in 2007; and the launch of the high end TV tax relief in 2013 – which spurred screen sector investment more generally. Perhaps we are at another milestone now – a moment to refine the support regime, update the relationship, and clarify what the national objectives are in this space.
The alternative, in John McVay’s words, is “managed decline” of the indie sector. “It hasn’t been growing, it isn’t growing, and it wont grow without further intervention. This is a problem - but it’s also a huge opportunity”.
Labour’s plans for the Creative Sector
At Labour Party Conference in Liverpool last week, ITV hosted a great event with ‘Labour Creatives’ - the group set up by the party to engage with the creative sector. The bulk of it was a Q&A with Thangam Debbonaire (the new Shadow Secretary of State for Culture, Media and Sport) and Sir Chris Bryant (the new Shadow Minister for the Creative Industries and Digital) - and then a drinks reception with speeches. There wasn’t much talk of the screen sector specifically, but I found it really useful in terms of understanding how the party’s approach to the creative sector is developing. Here are the key takeaways:
Enthusiasm: Thangam and Chris clearly have bucket loads of enthusiasm for their new roles, and this was strongly conveyed! Someone described the event afterwards as having a kind of ‘hectic energy’. They talked excitedly about what the new brief means to them, shared Ru Paul quotes and stories of their creative pursuits as children, and discussed whether floristry is part of the Creative Industries (unclear at time of writing). This is hugely welcome - you don’t get many new Ministers or Shadow Ministers demonstrating such passion. Perhaps it’s something to do with the Culture, Media and Sport (CMS) brief - the current DCMS Ministerial team are full of enthusiasm too. But this was on another level.
Economics: Thangam talked about the economic significance of the creative sector, and that Keir strongly believes the sector “is about economic growth”. She also said she “fought” for her main speech to be part of the economy section at party conference and promised to “lobby internally” to ensure the sector maintains that recognition. Again - this is really welcome - but there is a difference in the way Labour talk about this than the way Lucy Frazer and her team do. Labour seem to talk more about the arts and culture - whereas I think I’ve heard the Conservatives talk more about TV, film, gaming, and other bigger economic drivers. Maybe that’s a Tory/Labour thing, maybe it’s a government/opposition thing, maybe Labour are still developing the language they use around this. The guy next to me was from advertising and noted that they didn’t mention his sector at all - a part of the creative industries that is much bigger than music, museums, design, or performing arts.
Creative Education: this is a key part of Labour’s CMS and Education policy, and is great to see. Thangam and Chris both talked about the importance of inspiring and enabling creative talent in children - but also about career visibility, and making pupils aware of the opportunities that exist. Thangam talked about ensuring opportunity is evenly spread (geographically, societally), and the need to close the “career expectancy gap”. That is something Nadine Dorries used to talk a lot about too, when she was at DCMS.
Spending: Labour are obviously taking great care at the moment to demonstrate a fiscally responsible approach to public finances (and an “iron discipline”). In line with this, in response to a question about funding, Thangam said “there are things we can do other than splashing the cash - we will look at other ways of leveraging finance in the sector”. Interestingly though, they did voice support for a campaign ask from the Society of London Theatre to pay for every child to go to the theatre at least once before they leave school. It costs about £175m over a Parliament/spending period, which is not huge, but also not nothing. You could say that’s in line with their commitment around creative education, but it’s perhaps also an indication of future prioritisation within the CMS brief.
Plans for Government: Thangam and Chris also spoke about “things you’re already doing that we as a government could help with, for example skills initiatives”. On the skills side, they repeated a policy commitment to reform the Apprenticeship Levy, which will be welcomed across the sector. Thangam also spoke about cultural exports - which is positive - and referred to “some things we could do quite quickly to make a big difference, for example looking at the role of the British Council”.
It’s worth saying too that both Thangam and Chris - and their aides afterwards - stressed how much Labour wants to engage with and hear from the sector. On stage, Chris’s exact words were “these ears were made for lobbying”, and said he’s already got 25 roundtables in the diary. So get in touch!
Thank you to ITV for a great event.
Things you may have missed
📺 New Ofcom broadcast chief: Cristina Nicolotti Squires has been appointed to lead Ofcom’s work in regulating the UK’s TV, radio and on-demand services as Group Director for Broadcasting and Media. She comes from Sky News, and ITN before that. Top of her intray, as Alex Farber writes, is what do to about GB News.
⚖️ CMA/Broadcasters investigation: The Competition and Markets Authority has launched an investigation into a group of broadcasters and production companies, including the BBC and ITV, over their use of freelance staff and services. One to watch.
🌹 Thangam Debbonaire’s party conference announcement: in her main speech, the Shadow Culture Secretary announced ‘Space to Create’ – a “national cultural infrastructure plan to fire up the engines of the creative economy”. This includes a “national cultural infrastructure map so that local leaders, businesses and philanthropists are better able to spot cultural spaces at risk and opportunities for investment and development”. You can watch it here.
😥 C4 are axing Steph’s Packed Lunch: This is really disappointing. In a statement, C4 praised the show for being “an outstanding springboard for developing local talent behind the scenes” - but also cited “audience habits changing quicker than ever” and the need to make “difficult decisions”. It’s disappointing because SPL was experimenting with new ways of delivering PSB programming to an at-home audience, and it’s the kind of show the big streamers don’t make. C4 exists to commission programmes that others won’t, and invest in areas that others don’t. SPL was a great example of this - an argument C4 deployed to great effect during the last privatisation battle (which I helped them fight). It’s also filmed in Leeds for goodness sake! C4 say they will be “reinvesting the budget previously committed to Steph’s Packed Lunch into other Nations and Regions productions” - tbc detail.
What to watch
Three films this week - all from me - and all from the London Film Festival (thank you to the BFI and Channel 4 for inviting me and providing tissues where appropriate).
‘All of Us Strangers’ (Film4, with Andrew Scott and Paul Mescal). This is a MUST see - but be warned - it’s also an emotional gut punch of a film. I’ve never seen anything like it, and don’t really have words to describe it. I don’t normally get emotional at films, but I was in pieces for this. Film4 have backed a corker here. It’s due for release in January - and I recommend catching it on a big screen.
‘One Life’ (BBC/See-Saw/Warner - with Anthony Hopkins). Another must see. It’s the true story of Nicholas Winton - the British humanitarian who helped save hundreds of Jewish children in German-occupied Czechoslovakia just before the outbreak of the Second World War. I was also in pieces for this (honestly, this never normally happens). It’s due out in January. Take tissues.
‘The Kitchen’ (Film4/Netflix - directed by Kibwe Tavares & Daniel Kaluuya). It’s set in a dystopian, futuristic London and has a look and feel like I’ve never seen before in a British film (kudos to Film4/Channel 4 for backing it). At the premiere, Daniel Kaluuya (who also wrote it) described it as a story that is “very British, very London, but also very global” - which is spot on. There are clearly themes in it that will resonate more broadly. But the main reason you should see it is for the performance from the incredible young actor in the lead role, Jedaiah Bannerman. It’s due out later this year, and I recommend it if you want to see something totally different. I didn’t cry at this, which I think is progress.
Send me your TV or film recommendations - new or old - so long as it’s not your own content!
They don’t make them like this any more
As many of you will know, the great Nick Mason Pearson is leaving the BFI after an incredible 19 years. Nick is one of the nicest and best connected people in the screen sector - often seen hosting politicians and other VIPs on a red carpet - and must have worked hundreds of premieres and screenings over the last two decades. Nick - very best of luck for the future.
Correction
I’ll always correct things where I’m wrong. In the edition ‘Reasons to be positive about TV’ I wrote about Warner Bros Discovery’s expansion of their Leavesden studios in Hertfordshire. I said it was undergoing a ‘forty thousand sq ft expansion’. In fact it’s a whopping four hundred thousand sq ft expansion. That’s even better news - and I’m happy to correct it.
Get in touch
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You can read previous editions of ScreenPower here.
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