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Behind the scenes of UK film

14 February 2011

The King’s Speech might have triumphed at the Baftas, but behind the scenes the UK independent film industry is going through a period of major upheaval.

In years to come, film historians and students are likely to look back at the next few weeks as a pivotal moment in the evolution of the British film industry. The King’s Speech is flying the flag for British film, cleaning up at last night’s Baftas and tipped for success at the Oscars.

But in a few weeks, The King’s Speech’s principal funder, the UK Film Council, will start closing down, the victim of the government decision last year to axe the film agency and transfer many of its functions over to the BFI.

Some 50% of the UKFC’s staff are likely to lose their jobs, just as the agency celebrates the biggest success story in its 11 year history. The rest of the UKFC staff, including the Film Fund team responsible for backing The King’s Speech, are expected to move over to the BFI from April.

For many industry execs, the big question is whether the government’s intervention will prove to be a hideous mistake that will irreparably damage the fragile film industry. Or whether the changes, together with more public funding being pumped into film, will prove to be a springboard for future growth.

Strange timing - The closure of the UKFC
Head of the UKFC Film Fund, Tanya Seghatchian, is careful to be diplomatic when she‘s asked to comment on what she makes of the closure of the organisation just as The King’s Speech is riding high. Citing £13m of receipts in the films first 13 days, she says its success “is all the more ironic in the light of the abolition.”

She points out that the UKFC was the only public funder of The King’s Speech: “So it’s vital that there is a robust public funding alternative which enables all kinds of quality films to get made. The axing of the UKFC caused fury amongst its supporters, who accuse the government of undermining 11 years of work and deliberately targeting the high profile UKFC so it could soften up the public and other arts quangos for cost-cutting and culling.

Working Title boss and UKFC chairman Tim Bevan called it “a bad decision, imposed without any consultation or evaluation.” Critics say the decision was made in haste, without a plan for replacing the UKFC’s functions.

The politics of film funding
Culture Secretary Jeremy Hunt recently elaborated on his reasons for closing the UKFC, saying high salaries, such as former boss John Woodward’s £208k a year, were not the primary factor.

Rather, its fate was sealed by what he saw as the UKFC’s failure to arrest the relative decline of the independent filmmaking sector. “There ought to be a huge opportunity for British independent filmmakers to grow and grow to a significant size,” said Hunt, who argued that only a new organisational structure could help achieve this.

Certainly, there are those who applaud the government’s decision. Perhaps the most vocal is producers’ body Pact. “For ten years we were promised the UK Film Council would change the industry – it didn’t,” says Pact chief executive John McVay.

He argues that the UKFC saw itself as a kind of “public sector tycoon” that acted like a feature film studio and that liked to keep producers reliant on public subsidy. In doing so, the UKFC “aligned itself contrary to the interests of the private sector,” and failed to nurture an entrepreneurial film industry where producers could own their IP.

Pact has long been critical that investment terms from public bodies like the UKFC prioritised their recoupment over producer earnings – meaning that without their own funding, producers have little negotiating leverage with investors. For example, Ken Loach’s Palme d’Or winner The Wind that Shakes the Barley took $26m in worldwide box office revenues – yet its production company Sixteen Films earned just £12k in returns.

For McVay, the demise of the UKFC offers the chance “to reset the agenda”. The BFI “doesn’t have the philosophical and intellectual prejudices of the UKFC built into it. The UKFC didn’t root for producers – they thought they could do it better.”

Others say it’s time to accept the government’s decision and move on. It’s best summed up by Film4’s head of commercial development, Sue Bruce-Smith. “There are a lot of people who think it was a decision made in rather too much haste and without sufficient consultation. But we need to move forward very positively looking at what we can make of the new scenario. And we still have the money – in fact we have a promise that the money will go up.”

Optimism about the future

Given that the film industry’s main public funder has just been scrapped, there’s a curious degree of optimism about the future.

Of course, the film-funding climate remains challenging. Equity financing is tentative, banks remain risk averse and the pre-sales market continues to be difficult although it has picked up recently. DVD revenues are also falling, while the revenues from online are only beginning to emerge. In all, 72 British films were made last year, down 11% on 2009.

“Where films have key elements that the market can respond to, certain talent attached for instance, they will find finance but whenever the economic climate becomes tougher, it is the riskier projects that find it even more difficult to get funded,” says the UKFC’s Tanya Seghatchian.

These funding difficulties have led to big changes in the industry. Most notably, film budgets have come down considerably, as producers realise the market will not sustain the budgets that the production community was used to working with.

On the positive side, though, public funding is actually on the increase. The BFI has pledged to increase film-funding levels by 20% from the UKFC’s £15m to £18m, finding the money through overhead savings.

Meanwhile, one of the first decisions of Channel 4’s new chief exec David Abraham was to increase Film4’s budget from £10m to £15m. And the BBC has said it would continue to invest £12m a year in film despite the cutbacks it’s facing.

Film 4 and BBC films
Film4 recently backed 127 Hours and Peter Mullan’s Neds, and has Kazuo Ishiguro adaptation Never Let Me Go, Kevin MacDonald’s Eagle, Richard Ayoade’s Submarine, and Lone Scherfig’s adaptation of bestselling book One Day coming through.

Film4’s Sue Bruce Smith says the funding increase was a ‘huge shot in the arm’, and should allow the department to expand, backing more than the 10-12 films it currently co-produces every year, and the 60-70 films it develops. “It will allow us to take more risks and experiment more, and also engage with projects that might previously have been a bit out of our reach,” she says.

BBC Films recently backed Bafta nominee Made in Dagenham and StreetDance 3d, and has upcoming films including Brighton Rock, West is West and We Need to Talk about Kevin. A recent BBC Trust review underlined its importance to the UK industry, guaranteeing its £12m funding.

Transfer of power - UKFC to BFI

The transfer of powers from the UKFC to the BFI will start from the beginning of April, after the two organisations complete a period of due diligence. The BFI’s head of press and public affairs Nick Mason Pearson says “the intention is that the BFI will pick up most if not all of the responsibilities of the UKFC.”

These include the distribution of lottery funds, certification of tax credits and the UK Media Desk. Later this year, the BFI plans to consult with the industry as it develops its new strategy for how lottery funding should be spent on film.

Culture minister Ed Vaizey is also holding round table discussions with film industry figures in an attempt to map out a coherent film policy.

All this is taking place against a background of cuts at the BFI, which has its own reputation for being overly bureaucratic. It is dealing with a 15% reduction to its £14.5m government grant.

With so much up in the air, what should producers looking for funding do?

The UKFC’s Tanya Seghatchian says: “We are continuing to accept applications and make funding awards to film projects.” She adds: “The aim is to make the transition process as smooth as possible for filmmakers, so our advice would be to apply for funding at the time that is right for the project.” The BFI will honour all Lottery award commitments made by the UKFC through the Film Fund.

The UKFC is set to leave behind some highly anticipated films that will be released in coming months, including Terence Davies’s The Deep Blue Sea, Lynne Ramsay’s We Need to Talk about Kevin, Andrea Arnold’s Wuthering Heights, James Marsh’s Project Nim, Steve McQueen’s Shame and Phyllida Lloyd’s The Iron Lady.

This roll call of top level directors is testament to the fact that, while it might not have effected huge structural change in the industry, the UKFC leaves behind an industry rich in talent.

Film4’s Sue Bruce Smith remarks: “People have always said that making films is difficult – I don’t think it is ever going to be an easy option. But I think the lowering of budgets, exciting new talent, the increase in public funding and the success of films like The King’s Speech, means it’s a hugely exciting time. The important thing is to harness it, and make sure we build at both ends and don’t forget the new talent coming through.”

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Andy  | February 16, 2011
The key phrase here is, 'the biggest success story in its 11 year history' The King's numbers and awards are indeed impressive. One film to reach this level in 11 not.

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