FUNDING Baby Driver part of £415m tax relief benefit bill

For Indies such as Warp government finance through the BFI (previously the UK Film Council) and the still-operating regional arms of the old UKFC such as EM Media and Screen Yorkshire (significant distributors of EU finance which will soon disappear thanks to Brexit) are absolutely central to their ability to produce feature films. Without money in the form of non-repayable grants there would be no '71, This is England, Tyrannosaur and so forth.

The BBC and Film4, terrestrial public service broadcasters (with Sky, and its Sky Atlantic channel key to Warp's high-budget TV series The Last Panthers) are also crucial at this level of budget, very rarely exceeding £5m ('71 did, at £8m).

For the big six, and their subsidiary production arms, such as Working Title, just as crucial is tax relief, which will typically far exceed the entire budget of Indie films. 20 years after the Tory free market PM Thatcher scrapped the quota system that ensured cinemas screened a minimum proportion of British films (most European countries, notably france, still have such laws in place), the Labour government recognised the struggles of the industry with a range of tax relief measures, that the current Tory government has (reluctantly) kept in place.

The extent of this varies across the UK, with additional relief available in Northern Ireland (though even more is available in the Republic of Ireland), and indeed there is fierce international competition to attract film productions through tax deductions, including several US states offering high levels of relief.

The scale of this tax relief is clear from the report on 2016 payments, hitting £600m in 2016, including WT's Baby Driver. The tests for determining the 'Britishness' of productions are controversial, with minimal cultural consideration, more raw economic factors determining eligibility. If you read the BFI's annual reports (you should - an amazing source of learning) you'll find many clearly American films accordingly categorised as British.


Big-budget films receive increase in tax relief to almost £600m.

The government paid out almost £600m in tax relief last year to the makers of blockbusters including Baby Driver, Star Wars and T2: Trainspotting, as well as big-budget TV dramas including The Crown. 

The payouts were part of £751m that the Treasury awarded in tax relief to films, high-end dramas, video games, animations, children’s TV shows and theatre productions that passed a “cultural test” that qualified them as British. 

The government’s figures showed that the total awarded in tax relief in the creative sector rose by a third year-on-year from £564m in 2015. The test includes criteria such as the cultural content of a production, how much of it is shot in the UK and the proportion of stars and crew who are from Britain or Europe. 

The government’s tax credit system has proved hugely successful in stopping big-budget film and TV productions, as well as talent such as games makers and special effects workers, going to cheaper locations such as eastern Europe or to other countries offering bigger incentives.

It has also helped attract investment from the deep-pocketed newer arrivals on the film and TV scene, such as Netflix and Amazon, which have backed productions in the UK including The Crown, which had a total budget of £100m, and fashion drama series The Collection. 

Last year there were 175 films completed in the UK that claimed tax relief, with the Treasury paying out £415m, up from £339m the previous year. Relief payouts for high-end TV – dramas that cost £1m or more per episode – rose from £104m to £163m. 

SOCIAL REALISM profile of godfather Ken Loach

Some featured films in the BFI guide to SR.

With the frequent focus on Working Title, the term social realism is thrown in a lot on this blog. To have any grasp of that, there are two names you should be familiar with: Mike Leigh and Ken Loach. I read an interesting Loach interview in today's Guardian - including a nice dig at that paper's conservatism compared to The Morning Star - which starts with a look at his politics and how these are reflected his latest film, just out, but goes on to look over his entire 50 year film-making career.

Loach and Leigh are both iconoclastic, exceptional auteurs: both typically refuse to issue a script, preferring to workshop a scenario with their cast (often, mostly in Loach's case, untrained non-professional actors), and Loach even shoots his films in chronological order, breaking rule 1 of film production! This, and their focus on working-class protagonists and their struggles in an unsympathetic political culture, has seen both struggle to win funding in their homeland, with government agencies baulking at the notion of funding unscripted projects and studios/investors seeking star-led projects.

Both, especially Loach, have managed long careers by pre-selling distribution rights (BEFORE production commences) in European markets like France and Germany where both are widely acclaimed - a funding method threatened by EU proposals to force producers to sell EU-wide rights only, and barring territory by territory deals (great news for the studios with the clout and presence to achieve this, but a sure death-knell for Indies if its implemented in the name of neo-liberal, free market orthodoxy).

A sample quote:

StudioCanal UK film biz risks Brexit sinking

This is a great overall look at the operations of StudioCanal, a key player for both Warp and Working Title, and also a producer itself now (notably Paddington and a forthcoming sequel)

StudioCanal UK are already seeing costs up by 15% as sterling (the UK currency) has nosedived in value since the referendum. Their CEO, Danny Perkins, explains that the UK will need a specific treaty (as Switzerland has negotiated) to gain continued open access to EU cinema markets - which could take years, if it ever happens. Euro-financing has also been made more difficult to access. If US studios fill that void, they are MUCH less likely to support ideas which reflect British culture instead of taking a more generic, commercial approach.

Consider the practicalities too of StudioCanal personnel trying to visit other Euro branches, or even just pre-production visits and research if UK citizens require visas to do so.

Why EU law and Brexit could kill UK Indies SUMMARY

Realised I'd blogged a few on the same theme, so I'm gathering them together in this revised post, looking at how influential EU law is - and the possible impact of the UK's surprise Brexit vote. In a nutshell, the EU as an increasingly neo-liberal, free market institution is pushing for reforms that in theory boost competition - but in reality will severely undermine Indies and slash film production while boosting the conglomerates. Brexit poses similar threats, with production, funding and distribution all facing huge cuts at the Indie level, co-productions made difficult and access to EU cinema markets cut, while the huge studio production industry will face issues too.

Rebecca O'Brien is quoted in this nofilmschool feature, a detailed analysis of how the industry works - and will struggle post-Brexit. It argues there are 3 key areas of concern:

1. Fewer European co-productions
2. Decline in British cinema—both in quality and quantity
3. UK may no longer be a top international filming destination

1: Fewer European co-productions

Co-productions are the lifeblood of European cinema. In 1994, Treaty No. 147, or the European Convention on Cinematographic Co-Production, was ratified in order to "safeguard creation and freedom of expression and defend the cultural diversity of the various European countries." It was not only the portal to creative synergy in a continent rich with varied cultures, but it also created the framework for film financing across international borders.

Co-productions significantly reduce risk; where one production company might be unwilling to assume debt on a single film, three companies can share the risk and bring different financial resources to the project, such as country-specific tax incentives and investors. In an industry built upon the assumption of risk, a co-production can mean the difference between development purgatory and getting a film made.
Furthermore, co-productions can receive aid of up to 60% of the production budget.
Rebecca O'Brien, a producer on I, Daniel Blake, said that the success of co-productions is exactly the international cooperation for which Europe at large should strive. 

2: Decline in British cinema—both in quality and quantity