The British Film and Television Industries - Communications Committee Contents


APPENDIX 5: COMMITTEE VISIT TO LEAVESDEN STUDIOS, 16 JULY 2009


The Committee was received by Roy Button, Managing Director, Warner Bros, and Colin Brown, British Film Commissioner, who briefed them on the work and business model of Leavesden Studios. The Committee were then given a tour of the facilities, including the Harry Potter sets. The visit finished with lunch, hosted by Mr Button, at which the British Film Commissioner (BFC) provided more information about his role, and the key drivers behind inward investment in the UK film industry.

Leavesden Studios

Leavesden Film Studios, located in west Hertfordshire is a film and media complex situated on the site of the former Rolls-Royce factory at Leavesden Aerodrome, which was an important centre of aircraft production during World War II. Leavesden Studios is one of only a few places in the UK where large scale productions can be made. The studios contain approximately 500,000 sq ft (50,000 m2) of flexible space which includes stage space, production office space and support buildings, along with an extensive 80 acre backlot which offers a 180 degree uninterrupted horizon which can be used for exterior sets. At any one time, 700-800 people could be working at the site, but this very much varies with the films under production.

Warner Bros. UK has had a permanent base at the studios since the first Harry Potter film was made here in 2000. They have so far made six Harry Potter films, box office receipts for which already exceed the 22 Bond films. Warner Bros. are embarked on a 254 day schedule to film the seventh and eighth Harry Potter films, which will be released in November 2009 and July 2010. Numerous commercials and music videos, and other feature films have been made at the studios. The films include Bond films, Star Wars and The Legend of Sleepy Hollow. There are currently five films shooting at Leavesden.

Warner Bros. have been active in the UK, initially as a distributor, since 1923. They started production in 1972. Since 1992, they have produced about 40 films in the UK at a cost of about US Dollars 11 billion. Warner Bros. UK's current lease expires in 2010. After that, Warner Bros. have plans to renovate and develop the studios further, but these plans are yet to be finalised and approved. The development would require planning permission from two local authorities, Watford and Three Rivers. Mr Button said that they were receiving good cooperation from both. This expansion would increase UK studio facilities by one third. The studios would operate commercially, for other companies to hire, and would become a competitor to Pinewood. As part of their development plans, Warner Bros. propose to create a Harry Potter museum as a tourist attraction, which they expect to lead to 2-300 permanent jobs on site.

Views on skills and training

Mr Button said that the UK had a very good skills base. He added that it was a good base for production of a film because it was easy to move equipment etc in and out of the UK and because UK film crews are internationally mobile. He thought that the UK film academies were providing a good grounding in skills, though it was essential to bring students into the studios on work placements. However, he considered that the universities were not offering the necessary grounding in digital skills, compared with France and Germany; hence the CGI sector had to bring in foreign trained students.

This view was supported by the Mr Brown, who said that the UK visual effects specialist companies (which are all based in Soho), work extremely well together and produce very high quality output. But the UK was not training enough visual effects artists—many more people with mathematics and computer science skills need to be trained, but there are gaps in the provision of training for these skills. Mr Brown raised the funding rules under which Skillset operated, and questioned whether the UK Film Council's training money, channelled through Skillset, reached the right targets. He thought that the UK was still "unjoined-up" on training.

Views on UK tax credit scheme

Mr Button strongly supported the current tax credit scheme. He noted that it was available for above the line costs (salaries of actors, director, etc) as well as below the line costs. He said that the UK Film Council was very helpful in operating the scheme. The documentation was straightforward and the turnaround time was good. Also, the fact that the rebate was government guaranteed gave film producers and financiers "comfort and confidence". In this context, he added that he did not expect any change in the scheme in the event of a change of government.

The one area in which he would welcome change would be the "use and consume" provisions. This led to a loss in the continuity of crew. UK studios' concerns about allowing shooting abroad to qualify could be met by putting a cap on qualifying shooting in foreign studios.

Finally, Mr Button stressed the importance of a attractive tax break scheme, given that so many countries and US states are competing for film business. He said that his board would consider it "fiscally irresponsible" to make a film in a country/state without a tax break.

The British Film Commissioner

The main role of the British Film Commissioner is to persuade American producers to make films in the UK. This includes major Hollywood producers as well as independent film companies. The Office of the British Film Commissioner consists of the Commissioner himself, plus four staff in the London office, and one member of staff based in Los Angeles. Mr Brown said he would find it very helpful to have one extra member of staff based in LA to help get more inward investment. Mr Brown noted, by way of example, that the Australian Film Commission, invested more money than the UK in events to try to stimulate US inward investment.

The figures for inward investment in 2009 are encouraging. In July 2009, the UK Film Council published the UK film production statistics for the first half of 2009. The numbers first half year (H1) production in the UK are the best since 2004. The total UK spend value in H1 2009 was £535.1m, compared with £363 million in H1 2008. Of the £535.1m total, £436.2m was accounted for by inward investment films such as Harry Potter and the Deathly Hallows Part 1, Clash of the Titans and Gulliver's Travels. Mr Brown said that the low figure for 2008 was a blip, caused by the writers' strike and actors' renegotiation in Hollywood—leading to uncertainty over production plans—and the high £/$ exchange rate. He expected 2010 to be even better than 2009.

According to the Mr Brown, the key drivers for success in inward investment are: the exchange rate; and the tax relief system for UK films. His Office had commissioned research which compared costs of making films in ten countries, and the UK came out second cheapest. Hungary was the cheapest. The two areas which drove up costs in the UK were construction costs and stage space.


 
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