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Is there a cure for British film? Or has the cure at last been found? Over recent decades, goodness knows, the nation’s cinema has had its times in the critical ward. In the nasty nineties an industry surfeited with subsidy, like a patient suffering red-alert high blood pressure, coughed up a few accidental good movies each year amid the multiple setbacks and seizures. But this year has looked almost like a return to health.

From The Queen to Borat, not forgetting the rejuvenation of agent 007, UK screen talent has had front-page attention worldwide. The man I am talking to in an office off Upper Regent Street, in London, knows about these ups and downs: as CEO of the UK Film Council John Woodward has helped to manage them. Sporting end-of-a-long-day business garb (discarded jacket, tieless shirt) and end-of-a-long-year tousled hair (or hint of), he is telling me, as an example of what the Council has done best in its six years of administering a country’s aid money to film, how it once rescued an ailing British movie that became an international hit.

“We’ve never found it difficult to identify the brightest and best. Bend It Like Beckham was one of the first films we backed. Gurinder (Chadha, filmmaker) couldn’t get the money to make it. But it became a big success and was an influential film in showing how Asian people can be positively represented on screen.”

The film bent the rules the way David Beckham bends footballs. A film about Indians in England? Unbankable. A film by an unknown Anglo-Asian woman? Unthinkable. A film with no stars? Forget it.

But of course there are no rules. A subsidy outfit like the Film Council learns that the hard way. The country’s main funding body is supplied with £23m a year by the government and deploys another £30m from the Lottery fund, plus £18m or so from returns on investment. Being its boss is like being one of those fielding machines in cricket – to change sports analogies – that hurl practice balls at catchers. Every year Woodward chucks £71m at movie productions and other worthy causes (film schools, regional agencies, art cinemas), hoping recipients will catch the cash then do something useful with it.

In 2006 it has all started to work. A British film won Cannes Palme d’Or: Ken Loach’s The Wind that Shakes the Barley. Other British films picked up festival prizes: Andrea Arnold’s Red Road, Paul Andrew Williams’s London to Brighton. James Bond triumphed in the multiplexes. And, says Woodward, “on the other side our studios have been servicing big-budget American movies. Films like Harry Potter or the Philip Pullman film (the forthcoming His Dark Materials) come into Britain and drop hundreds of millions of dollars into British production. It keeps the infrastructure together. It cross-subsidises lower-budget indigenous films.”

Yet a decade ago, before the Film Council was born in 2000 with a remit to knock sense into the industry, British movies were a bad joke. At press shows a despairing chortle was heard every time the words “National Lottery” appeared on screen. Any movie cursed with money from that source seemed destined to ghastliness.

“I don’t want to slag off the Arts Council which handled Lottery money for cinema then,” says Woodward. “But their scheme was to support any film that couldn’t get investment. So it was a self-fulfilling system. If you had a film no one was interested in, they gave you the money.”

Like – I reach for an infamous example of squanderbug British cinema – Sex Lives of the Potato Men? “No, that was ours, I have to fess up.” Faint blush on executive cheeks. “But we’re allowed one miss. It’s not like the Arts Council films, most of which never even reached the screen.”

There are still slip-up movies today, but there are as many successes. “The industry is unbelievably resilient. Two years ago there was a crackdown on tax shelter by the Inland Revenue which wiped out possibly half the production output, films that would have been released this year. Despite that culling there are a lot of new movies and in my view they’re a vintage crop.”

What has changed? Attitudes? Talent? “We’re at a point where we have a stable funding climate and we’re telling stories that are true to ourselves and our own culture and that people want to go and see.”

Cheaper technology must help too: more people can make films. “Clearly it’s easier because you can go to Dixons to buy a quite high-resolution camera, you can load software on your Macintosh, and occasionally a film like that – Tarnation, for instance – will appear. And in terms of the amateur explosion, just go to internet sites and look at these short films kids are making and putting up.

“But in feature films there are still expectations of professionalism and production values that don’t come cheap. You still need to pay good cameramen and hire actors. The point where things are really changing is in distribution. Right now the Council has a fund to install 240 digital projectors, costing £60,000 each, in British cinemas. This is already having an effect.

“We’re not asking managers to bid money but time. We’re asking, ‘How much time will you set aside for specialised films each year?’ Because with digital projection a small distributor with a difficult film no longer has to say, ‘It’s costing me £700 to strike a 35mm print. How many must I make to get into cinemas?’ With a digital master it costs just £50 to make a digital copy. And with a digital cartridge a projectionist can swap and change programmes, he can pick from 20 or 30 films every day. Movies don’t stack up in cans, making it impossible to store more than one or two in a projection room.”

That’s the Film Council’s big giveaway this year. But Team Woodward also parcels out money annually to the British Film Institute (£16.5m), regional screen agencies (£7.5m), training programmes (£6.5m) and help for arthouse distributors trying to market worthy-but-difficult films (£2m). In addition, development and production funding – money to help films be made – amounts to £17m, with £8m going to films with plausible commercial prospects (like Gosford Park or The Constant Gardener).

Is this enough? Isn’t the area needing most money – that of challenging, innovative filmmaking – getting the least?

Woodward reminds me the Film Council stepped in to help Red Road and gave a cash injection to The Wind that Shakes the Barley, whose Irish-republican sympathies hardly guaranteed a windfall in English cinemas.

“But yes, there can never be enough money for independent cinema. I’ll give you a statistic: £300m was spent last year in telling people to go and see commercial films. That’s posters, TV ads and so on. Compared to that, £18m was spent on promoting arthouse or independent films. This tsunami of advertising for films like Mission: Impossible 3 or Pirates of the Caribbean has created an economic situation where cinemas have to focus on those Hollywood hits to survive.

“Digital projection is one answer. It will give a cinema more variety of choice, even if it wants to vary its programme for only a day or a showing.”

Another answer is the trickle-down effect of a successful national moviemaking business.

“The old question used to be ‘Is there a British film industry?’ The answer today is a definite yes. In the last 10 years British film has stopped being a cottage industry and become this thing” – Woodward makes a large fisherman’s gesture – “which employs 40,000 people and is generating about £3bn overall for the national economy.”

Money and opportunity are there and success breeds success. The Film Council re-channels part of each year’s profits from commercial films into new maverick projects. But cash isn’t everything. The greater the number of people picking up a camera, Woodward believes, the greater the need for those people to know what to do with it. Hence the large slice of Film Council money spent on schools and training.

“Because so much of what comes at us is sound and vision, people must be trained in how to put sound and image together. They need to understand that these things are all constructed, that they are put together by someone with a point of view and that we need to get behind that point of view and understand it.

“The danger is that we have a new generation of young people who know how to play with iPods and computers and webcams and DV cameras, but not necessarily how to get the best out of them. So the future for a national cinema isn’t just about film opportunity, it is about film awareness, film literacy.”

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