Funding of the arts and heritage

Written evidence submitted by Screen England (arts 146)

We are writing to submit Screen England’s response to the recent call for evidence regarding the enquiry into ‘Funding of the Arts and Heritage’. Our submission makes particular reference to ‘the impact of recent changes to DCMS arm’s-length bodies - in particular the abolition of the UK Film Council’.

1. In the DCMS announcement of 26 July 2010, Culture Secretary Jeremy Hunt proposed " abolishing the UK Film Council and establishing a direct and less bureaucratic relationship with the British Film Institute. This would support front-line services while ensuring greater value for money. Government and Lottery support for film will continue ."

2. Screen England would firstly like to state that the UK Film Council (UKFC) provided valuable expertise, coordination and leadership across the cultural and commercial film agendas, and there will be significant challenges faced by the film sector if it is to attempt to operate without a central coordinating function. The UKFC was also able to focus funding, particularly outside London, to ensure that Lottery money was spent to create both public value and commercial growth. Through its strong relationship with the Screen Agencies and its core funding, the UKFC was able to enable many millions of pounds of private, public and European funding and investment into the countries creative industries and front line services provided by the Screen Agencies. In the absence of the UKFC it would be a tragedy for the country if the valuable work they have begun were not to continue, albeit in a more cost effective form.

3. It is clear that the landscape of public funding for the creative industries is changing. The announcement of the proposed abolition of the UKFC comes alongside the replacement of Regional Development Agencies (RDAs) with Local Enterprise Partnerships (LEPs) , the details of which are yet to be determined. Together these changes will have direct impact on the structure of support for the creative industries across the UK , in particular on the support for the Screen A gencies which serve the UK’s creative industries .

4. The importance of these commercial creative industries cannot be underestimated. Widely recognised as a significant growth area for the UK economy moving into the digital age, together they contribute £60 billion a year, and represent 7.3% of the UK economy, comparable to the Financial Services sector. They play a central role generating significant profile for the UK abroad, at a time when technology is offering new platforms, distribution mechanisms and revenue opportunities for the creative content industries.

5. The UKFC set up the nine independent S creen A gencies in 2002 under the network of Screen England, to help it distribute its funds and nurture talent across England. Since then these agencies have grown and diversified to work across the full range of creative industries, encompassing talent development, production, audience development, skills and supporting businesses across film, television, games and new media. The agencies have developed significant experience in developing and growing the creative industries outside London. The agencies are small and effective; they contain key staff with in-depth industry knowledge, expertise, networks and contacts. They already work closely with the commercially focused private sector in linking together expertise, ideas and talent.

6. With their umbrella body, Screen England, they are currently in the process of re-configuring and consolidating the way in which they work. They are well positioned to provide expert business support to creative companies; they have a wealth of experience across the creative industries and have become adept at raising and combining public and private investment. They form a bridge to the commercial entertainment industry for local companies and make it their business to be knowledgeable on current business models and technology developments in the industry.

7. As well as nurturing film talent at a grass roots level and stimulating inward investment for film production which in turn boosts England’s local economies, the agencies play a key role in:

· delivering business support (between 2006 - 2009 provided practical support, including skills, investment and expert advice to more than 13,500 SMEs)

· securing public and private investment (over a three year period they raised £78m of investment into the England’s creative sectors);

· encouraging international development (each have worked with external partners such as UKTI to assist creative industry companies in their local area to take their ideas to the global marketplace)

· supporting convergence (each have been actively engaged in ensuring that creative talent is fully equipped to exploit the impending shift to new technology).

8. As the Screen Agencies re-structure around a more cost effective model of developing businesses and commercialising projects, it is important to ensure that the financial support is not halted altogether for this sort of valuable activity. There is a danger that the loss of the leadership and funding that was provided by the UKFC will create a real vacuum out of which it will be difficult to ensure a proper strategic model for creative industry development and growth outside London.

9. The Screen Agencies have grown to become a product of the market in their area, evolving over time to occupy the bigger footprint of the wider creative industries, not ‘film’ alone. UKFC money has underwritten this, but now the companies which the Screen Agencies work with and represent no longer see themselves to be restricted to the space of ‘film’ alone. Previous Governments have never addressed the issue of how to work effectively with a sector of SMEs by providing a clear delivery mechanism for supporting creative businesses. The Screen Agencies have been both opportunistic and responsive, and we believe that there is now an opportunity for Government to take the foundations we have laid and build on them to move forward with a broader approach.

10. Since they were set up, the Screen Agencies have used the RIFE Lottery funds allocated to them from the UKFC to leverage another £50m of investment into creative industry development for England. If the abolition of the UKFC were to spell the loss of this funding altogether, it would create a very big hole in the creative industries. UKFC money has often been awarded by the Screen Agencies as seed corn funding, which enables creative businesses to go on to leverage further revenue and move to the next level. Removing access to this seed corn funding would be damaging to the growth of the creative business on a local level, impacting on the creative industries as a whole.

11. However, this is also a time to grasp the opportunity to re-balance the relationship between production and culture in Lottery funding, an area which the Screen Agencies have argued the need to address to UKFC for a number of years. Yes, there needs to be an emphasis on the use of film subsidy to achieve economic benefits, but there also needs to be a focus on using funds to achieve broader cultural benefits, and this is something that we feel has not been maximised.

12. The latest reduction in annual grants from the UKFC to the Screen Agencies led to an unavoidable impact on assistance for Festivals and Exhibition Venues. As local authority budgets continue to be pressured, this area of cultural investment – arguably the area most deserving of public support towards film – will struggle to find additional resources. The UKFC had the wrong balance between exhibition and industrial film. We would argue that public money needs to be for public benefit, and there needs to be an infrastructure for cultural impact that can generates commercial benefits whilst also providing social or community value. For example three of the Screen Agencies are delivering a Lottery funded Rural Cinema Pilot Scheme in Wiltshire, Shropshire and North Yorkshire over the next three years, which will take digital projection equipment out to hard to reach areas to enhance access to culture, whilst strengthening social interaction and reinvigorating community participation at the same time. Also, talent development needs to have a higher priority, and we need to be able to invest in the next generation of talent at a grass roots level across the country, outside of London. The Screen Agencies agree that this is the way forward, and this is a new opportunity to expand on talent development whilst addressing the fragility of local film festivals, screening venues and mixed arts venues.

13. With the UKFC no longer in existence, and the structure of LEPs not yet determined, it is imperative that any future restructuring of funding should incorporate a strong recognition of the creative industries, so that this vital sector can continue to grow, to protect jobs and revenue, and to play its part in helping the UK out of recession. As we move into an increasingly digital future, we believe it is the Screen Agencies, or whatever they evolve into, that are best placed to continue to deliver this support. Their services respond to constant change in the needs of the local area’s businesses, the pace and complexity of which is especially great in the newer areas of the creative digital economy.

14. Operating at a local level means interventions and Government policy can be more flexible and responsive/reactive to the needs of all sectors and markets, and decisions can have a greater and more immediate effect. It is vital, therefore, that any change in funding or structures does not lead to a loss of locally-nuanced delivery. Instead, the RSAs can offer a network of business-led, sector-driven solutions, which Government can build on.

September 2010