Written evidence submitted by the British
Film Institute (BFI) (arts 211)
INTRODUCTION
— The BFI welcomes the opportunity
to submit evidence to the Culture, Media and Sport Select Committee
in its inquiry into Funding of the Arts and Heritage, as it is
very timely on a number of fronts.
— The BFI is at a pivotal moment in
its history, when the culture of film has never been so important
or more all pervasive across society as a whole—something
that has been reaffirmed by Government in its recent review of
Arm's Length Bodies.
— The BFI was founded in 1933 and granted
a Royal Charter 50 years later. It has five objectives:
— to encourage the development of
the arts of film, television and the moving image throughout the
UK;
— to promote their use as a record
of contemporary life and manners;
— to promote education about film,
television and the moving image generally, and their impact on
society;
— to promote access to and appreciation
of the widest possible range of British and world cinema;
and
— to establish, care for and develop
collections reflecting the moving image history and heritage of
the UK.
— We are grant-in-aid funded by DCMS—currently
through the UK Film Council until April 2011—receiving £16
million per annum, a grant that has remained static for the past
six years, in effect going down in real terms every year. The
BFI also receives an additional £1 million levy from commercial
terrestrial broadcasters to fund the television element of the
BFI National Archive. A further 58% of our total funding is self-generated
income, up by 50% compared to five years ago.
— This Inquiry is timely not just in
looking at the impact of the proposed cuts to the arts, but also
in the proposed restructuring of how the arts are delivered—including
film. Both of these changes have a significant impact on the BFI.
— Our mission is to ensure that everyone
has access to the broadest choice of film. We show and distribute
the sort of film that simply wouldn't be available without the
BFI's intervention. It is this broad spectrum of world cinema
presented by the BFI that acts as a catalyst to spark, inspire
and influence continued development across the whole of the creative
industries.
— A vibrant film culture is the essential
bedrock for a thriving film industry, whether that it is delivered
through the BFI London Film Festival which champions creativity
and originality by annually showcasing the best of contemporary
world cinema, or through BFI Southbank's dynamic programme of
screenings, on-stage talks and events such as Future Film, Dark
Fibre or Movie-Con. The BFI is a melting-pot for discussion and
debate around film, television and the moving image.
— The backdrop to this is the BFI National
Archive which cares for the national film collections. It is constantly
refreshed and the BFI continually drives audiences to it so people
can understand and appreciate their own place in society, for
instance through TV productions such as the Home Movie Roadshow
recently aired on BBC 2 or a major documentary featuring a dramatic
film of Scott's Antarctic expedition due to screen on the Discovery
Channel this autumn.
— Equally, the Archive and collections
provide an understanding of film as an art form, equal in stature
to theatre, dance, painting or music. It is a unique source of
enjoyment and critical appreciation for audiences, and a well
of inspiration for filmmakers to gain insight to the work of those
who have gone before.
— The BFI's evidence to this inquiry
is given within the context of our mission and aims.
RESPONSE TO
SPECIFIC ISSUES
POSED IN
THE INQUIRY
1. What impact recent, and future, spending
cuts from central and local Government will have on the arts and
heritage at a national and local level
1.1 In terms of the Arts as a whole, the
cuts, if they are as deep as proposed (25%-40%), will have a devastating
effect as it is unlikely that private or public sources can come
to the rescue in such quantity fast enough. Philanthropists do
not favour giving money to plug gaps in funding and there is less
money around anyway.
1.1.1 With increased emphasis on financial
income, organisations will be inherently risk averse leading to
reduced innovation which is essential for creative endeavour.
1.1.2 At a time of recession the arts play
a vital part in the confidence and international identity of the
national psyche—they also bond communities which will be
much needed in the proposed changes across the UK, moving from
regional to local structures.
1.1.3 During the Olympics in 2010 a global
spotlight will shine on the UK and with this level of funding
reduction, the overall programme of artistic excellence, scope
and ambition will be significantly curtailed—whether practically
in terms of reduced opening hours/days, or the ambition of projects
undertaken.
1.1.4 Britain's cultural scene is a major
attraction for visitors from home and abroad and it makes a significant
contribution to tourism and the economy. Spending cuts are likely
to result in reduced output or scope of programming in the arts,
which will have a negative impact on arts organisations' ability
to generate revenue as footfall decreases. Arts organisations
often work collectively to attract visitors to an area and many
businesses local to that area are equally reliant on those visitors.
1.1.5 There are very specific skills that
will be lost—and continuity of these skills will be under
threat. One example will be conservators and curators—all
organisations will be forced to reduce these—curators are
the result of years of personal and professional expertise in
specific areas.
1.1.6 Organisations which are delivering
less, and less able to "sell" themselves will be less
attractive to philanthropists. Even small donors like to invest
in success.
1.1.7 Capital funding reduction will lead
to revenue monies being spent to "shore-up" failing
estate and systems which in the long run will be much more expensive
for the public purse.
BFI-SPECIFIC
1.2 The BFI recognises that difficult decisions
have to be made in these challenging times and acknowledges that
it must play its part in helping to reduce public spending. However,
it is important in this context that the Committee understand
the BFI's current funding position.
SELF-EARNED
INCOME
1.2.1 The BFI has been on the same grant-in-aid
(£16 million pa) since 2004. For every £1 it receives
in grant, it raises a further £1.50 in self-generated income.
PENSION
1.2.2 The actuarial deficit on the BFI pension
scheme of £15 million is costing the organisation nearly
£1 million per annum in additional contributions.
SCREEN HERITAGE
STRATEGY
1.2.3 A report published by the House of
Commons Select Committee in 2003 said: "The BFI should take
the lead within the UK film and TV archive community and champion
the whole sector, particularly the regional archives, alongside
safeguarding its exemplary reputation amongst international peers.
An over-arching national strategy promoting both good curatorship
and increasing accessibility should be vigorously pursued."
1.2.4 In response to this, and at the request
of DCMS, the BFI developed and is leading the Screen Heritage
UK programme. A government capital investment of £25 million
announced in 2007 is to fund three core strands: a secure storage
and database; identification of significant collections in regional
film archives; and digitisation for access.
1.2.5 In the funding cut announced in June,
the Government reaffirmed the vital investment needed for new
state-of-the-art vaults with the right environmental storage conditions
to ensure the preservation and safety of the BFI National Collections.
It also reaffirmed funding for regional archive collection identification.
1.2.6 However, a cut of £2.5 million
was made to the digitisation and access strand of the programme
and this seriously impedes the total success of the whole project
in that whilst the national collection is safe and we know what
material is in there and in other significant regional collections,
the public cannot access the content as originally planned.
BFI FILM CENTRE
1.2.7 The BFI's business case demonstrates
the pressing need for a landmark cultural centre that addresses
its very severe and critical estate issues. It would enable the
BFI to consolidate its crumbling estate and help make it more
economically sustainable.
1. The British Film Industry—September
2003
1.2.8 In June 2010 the Government withdrew
its funding pledge of £45 million for the BFI Film Centre,
which triggered a further cut of £5 million that had been
pledged by the LDA. This has stalled the BFI's plans to replace
life-expired facilities on London's South Bank which are struggling
to cope with growing public demand for access to their cultural
heritage and to world cinema. Given the condition of the BFI's
estate, delaying investment will add a burden to public finances
in the long term and considerable ongoing risk to income should
the estate fail.
1.2.9 Furthermore, the BFI's plans included
significant partnerships across a range of organisations—from
universities to venues—to ensure that the centre acted as
a pivotal node in a digitally enabled network across the UK to
provide the widest possible public value. The BFI's ability to
achieve this is undermined by the cut in funding for the Film
Centre.
IMPACT OF
THE CUTS
ON THE
BFI
1.2.10 We have been asked to model 25% and
30% cuts in our grant-in-aid. Taken together with a flat cash
grant for the last seven years, the effect of inflation and the
additional £1 million per annum pension top-up requirement,
the total cuts to be found from the BFI are 6.5 million by year
four.
1.2.11 In the last six years our self-generated
income has increased on average by 10% per annum but this is now
flattening out. Nevertheless we are looking at new sources of
income, particularly in the digital arena and exploitation of
the BFI brand abroad.
2. What arts organisations can do to work
more closely together in order to reduce duplication of effort
and to make economies of scale
2.1 This must be one of the avenues to be
explored, but we are uncertain of the quantum of savings possible.
We are already exploring the potential for sharing common services
such as Finance, Human Resources, Estates and IT. From our own
experience, we are doubtful that there is significant opportunity
here as after six years of driving through economies, the quantum
of savings we can make in shared services is very low.
2.2 Recent analysis commissioned by the
BFI from HP shows that the BFI's support services are so old,
without significant investment it is questionable whether the
systems are even migratable to the modern platform needed to gain
any benefit from shared services.
3. What level of public subsidy for the arts
and heritage is necessary and sustainable
3.1 This is a very difficult question to
answer. Public subsidy is needed to support artistic endeavour
and allow such expression to find audiences—endeavour that
wouldn't happen otherwise without public intervention because
at the grass root level its market value is unproven.
3.2 Sustainability has to be considered
in a much wider context, outside the artistic world. The immediate
value of investment in the arts is difficult to quantify, the
chain of investment and effect is often long and too complex to
track accurately. And yet we all know that the reputation of great
cultures and great civilisations rests on the vibrancy of how
that culture finds expression through artistic endeavour and the
legacy that this lays down to inspire future generations. The
reason we know this in this country, is precisely because we have
one of the most vibrant, joined-up, wonderfully diverse and significant
cultures in the world. The legacy of global reputation speaks
for itself.
3.3 Investment needs to be prioritised to
achieve the following:
3.3.1 It is important that Britain maintains
an international profile culturally and creatively—no more
so than in film. It is one of our great global successes and an
economic generator. If it is to be allowed to continue to grow
and provide increasing contribution to Britain's GDP then it needs
increased and sustainable investment. A vibrant film culture is
the bedrock for a successful, thriving industry.
3.3.2 The national collections cared for
by the BFI are a vital part of our cultural heritage. The costs
of preserving and restoring—let alone distributing—such
an extraordinarily complex medium are very high. Once a film deteriorates
it is lost forever. However the cost of restoration is very high.
3.3.3 In this digital world there is an
audience expectation that they should be able to access the collections
online, which requires funding for preservation then digitisation.
3.3.4 Furthermore, it is not always possible
due to rights ownership.
3.3.5 There are other things the Government
could do which would not increase public subsidy but which might
help organisations such as the BFI offset cuts, for example: allowing
the BFI to make available "orphan works" held in its
collections. Income generated from exploiting these works would
be ring-fenced so that rights holders could be paid if they eventually
came forward to claim their works.
4. Whether the current system, and structure,
of funding distribution is the right one
4.1 With considerably less money to ago
around, we offer the following considerations:
4.1.1 Streamline funding—we should
ask ourselves no matter however painful the implications, how
many layers of administration should there be between the money
and the audience or artist? Every layer adds additional "back
office" cost. Should there be need for more than two layers?
4.1.2 Consider new governance structures
for organisations to be freed up so they can take a more entrepreneurial
role. The BFI, in designing a new direct relationship with DCMS,
is looking at the possibility of a "US" style Board
structure, with a two tier Patrons for major donors and a smaller
formal Trustee board. We are also seeking structures that will
allow a more flexible investment/borrowing model.
4.1.3 The BFI has benefited, and could benefit
significantly more, from co-productions with broadcasters. Publicly
funded broadcaster partnerships should be encouraged as they enhance
audience take-up, drive revenue and enhance the partner brands.
4.1.4 In seeking a "local" agenda—care
needs to be taken not to splinter funds into such small pots that
they cannot be sustainable or achieve anything really valuable
in themselves. The other danger is that in seeking "local"
rather than "regional" structures, more resource is
actually spent knitting together these small pots of money.
4.1.5 Lastly, the production of statistics,
target information and "proof points" of delivery are
expensive. Could they be reduced? Much of the answer to this is
how a greater pact of trust can be fostered with the public, where
public value is achieved through actual engagement, rather than
through KPIs or something similar.
5. What impact recent changes to the distribution
of National Lottery funds will have on arts and heritage organisations
5.1 We refer the Committee back to answers
given in response to question 4 above. However, we very much welcome
the government's commitment to increase Lottery funding by reducing
overheads and providing greater direct benefit to the public with
increased share going to the arts.
6. Whether the policy guidelines for National
Lottery funding need to be reviewed
6.1 See answer to Question 5.
7. The impact of recent changes to DCMS arm's-length
bodies—in particular the abolition of the UK Film Council
and the Museums, Libraries and Archives Council
7.1 These are very difficult times and call
for difficult decisions to be made. We have to look hard at where
value is added and make sure that as much as possible goes to
frontline services.
7.2. The BFI is pleased that it will from 1
April 2011 report direct into DCMS. The announcement to this effect
has great significance for film culture in Britain as it allows
the BFI to have a conversation at a departmental level alongside
other national cultural bodies and collections, giving a much
needed direct voice for film as an art form. The Secretary of
State proposed in his announcement: "establishing a direct
and less bureaucratic relationship with the British Film Institute."
The benefit will be a new, freer way of working that allows us
to explore other governance structures.
7.3 It is interesting that the reaction
from the film industry focused on the need to keep funding and
tax credits intact. The BFI agrees and was relieved to see in
the announcement an absolute commitment from central Government
that neither the lottery funding not tax credits were ever at
risk, and that going forward its cultural policy and strategy
for film will have equal voice and prominence.
7.4 It is critical, however, that specific
skills and expertise are not lost along with the arms' length
bodies being closed.
7.5 We refer the Committee to answers in
response to question 4.
8. Whether businesses and philanthropists
can play a long-term role in funding arts at a national and local
level
8.1 They already do. There are hardly any
of the larger charities that don't have a well developed fundraising
department tasked with raising those funds that GiA has, in recent
years, failed to cover with diminishing investment, increasing
costs and higher ambitions.
8.2 We can see that raising money for projects
outside of London can be more challenging, particularly when there
is less available money to go around.
8.3 It is commonplace to compare the US
model of philanthropy and charity giving with that in the UK.
However, there are fundamental differences between the two that
require a wholesale change in attitude from the public in the
UK, with a tax regime that is as supportive before we are likely
to see the same degree of giving.
8.4 Corporate and philanthropic donors do
not want to plug gaps in funding, they want to achieve additionality.
They are less attracted to investing in organisations that are
threatened. They are less likely to invest in the non-attractive
projects such as new roofs or drainage.
9. Whether there need to be more Government
incentives to encourage private donations
9.1 We would welcome more Government incentives
to encourage private donations.
9.2 A review of tax incentives that benefit
private donors in a similar way perhaps that Gift Aid does to
charities would help the development in the UK of a widespread
culture of philanthropic giving. This is akin to the more generous
personal tax relief schemes that exist in the US in the philanthropic
sector.
9.3 The BFI would like to see the acceptance-in-lieu
scheme extended to living donors, not just restricted to the estates
of the deceased. In other areas of the cultural sector acceptance-in-lieu
has brought over £250 million worth of works into the public
domain. We need to ensure that film collections can be preserved
intact and saved for future generations to enjoy.
9.4 A similar move should also be considered
for the assignation of rights to films and film collections in
lieu of tax so that that work can be exploited to provide greater
public value without additional burden on public finances.
9.5 We would like to see greater Government
support for projects that whilst they do not pledge public funding,
the intent and commitment instils a level of confidence amongst
others who may be more disposed to invest.
September 2010
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