January 13, 2012 10:56 pm

Film industry awaits direction

David Cameron’s visit to Pinewood studios this week to promote British film has cast him in the role of both hero and villain. His comments on the future shape of the industry polarised opinion among film makers.

The prime minister, striding around studio sets and surrounded by anxious-looking industry representatives, said public funding of film production should be rebalanced towards mainstream commercial movies.

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Ken Loach, the acclaimed British director of the Palme d’Or winner The Wind that Shakes the Barley, called the remarks a “travesty” and accused Mr Cameron of leaking his own government’s review of policy on the film industry, due to be published on Monday.

Commercial success was “hard to predict”, Mr Loach said, arguing that film makers were not entrepreneurs and measured themselves by creativity and originality.

“David Cameron has made a mistake. He has dived into the pool but doesn’t understand the water,” said Rebecca O’Brien, an independent film producer at Sixteen Films, the company set up by Mr Loach.

“He has hijacked this review with a sound bite and demeaned what is a complex report that has been worked on long and hard.”

The review by Lord Smith, the former Labour culture secretary, is expected to recommend that profits made from films be returned to production companies for reinvestment, as opposed to the original funding bodies.

Lottery funding used to be apportioned by the now-defunct UK Film Council but the money was considered a loan and was expected to be repaid from the film’s income.

Andrew Eaton, film producer behind A Mighty Heart and Junkhearts, said: “If you have kids and you give them pocket money, at some point you have to get them to take responsibility for it. The same applies here, otherwise the industry cannot mature into a grown-up business.”

The question of how to nurture UK film has taxed successive British governments. Should the industry, which straddles the commercial and cultural worlds, be subsidised for its artistic value or be left to commercial ­producers?

Film making contributes more than £4.2bn a year to the economy and more than £1.2bn to the exchequer, according to a report by Oxford Economics.

The UK has notched up some notable box office successes in recent years, including Slumdog Millionaire and The King’s Speech.

“I would be supportive of anything that does more to encourage UK producers to think about mainstream commercial success. Film is a global business with a worldwide audience. UK producers have to up their game,” said James Clayton, chief executive of Ingenious Media, which specialises in film finance.

“I argue that making commercial films is less risky than making art house films. Take the film St Trinians 2: it cost the same as a Mike Leigh movie, roughly £5m. The key point is making films for the right price.”

But a Financial Times review of 10 years of UK Film Council annual accounts shows that many of the so-called “mainstream” production companies that received significant public funding had fairly poor product ­performance.

Ecosse Films, which produced Wuthering Heights and Brideshead Revisited, was awarded a total of £6.2m in Lottery funding between 2001 and 2010 but recouped just £2.4m, or 39 per cent.

Number 9 Films, producers of Made in Dagenham and Intermission, recouped only £1.5m, or 21 per cent, of the £7.2m it was rewarded; Ruby Films, which produced Chatroom and Tamara Drew, was awarded £4.1m but recouped a mere 8 per cent, or £348,184. These figures involve Lottery awards from the Film Council, which was axed last year as part of the government’s “bonfire of the quangos”, and exclude regional or other grants.

Film producers are hopeful that Monday’s report will provide relief for the sector. But one person familiar with Lord Smith’s review said it was unlikely to tackle the need to give film companies incentives to become more international – by shooting more movies in Europe, for example.

The film tax regime, introduced in 2007, largely restricts relief to money spent in the UK by British production companies. It was not extended for UK actors or crew working abroad.

“As an industry we are still immature about running our business ... Every year people go to to Cannes and get drunk. It’s like an immature office outing. But we are getting better and more consistent, as seen this past year with our successes, “ said Mr Eaton.

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