UK animation sector in crisis, says report

The UK animation sector may no longer be viable without government support in the form of tax breaks, according to a new report from Animation UK.

The report paints a picture of an animation sector with a proud tradition of creating iconic programmes such as Wallace and Gromit, Bob the Builder, Noddy, Peppa Pig and Thomas and Friends which were devised, developed and animated in the UK and then exported around the world.

It argues that although the animation sector is relatively small, with revenues of £300m a year, it is an important part of the creative industries and has a wide impact. Notably, it overlaps strongly with the cgi and gaming sectors, boosts the licencing and sale of children’s retail products such as DVDs, books and toys, and is an important source of UK cultural identity.

But the reports says animation is facing a unique set of challenges, notably that many other countries now provide government support for their animation sectors.

This, it argues, “is putting severe (artificial) competitive pressure on UK businesses, making it far harder to justify production in the UK.”

It points out that shows such as Noddy, Bob the Builder and Thomas & Friends are no longer animated in the UK.

“Absent government action, UK animation may soon simply cease to be viable,” says the report. It says government support could take the form of a tax credit similar to the R&D or film tax credit, an investment fund or quotas.

The report was funded by lobby group Animation UK, and written by Rob Kenny and Tom Broughton of Perspective.