The British Film and Television Industries - Communications Committee Contents

Examination of Witnesses (Questions 1185-1253)

Ms Dinah Caine OBE and Ms Kate O'Connor

24 JUNE 2009

  Q1185  Chairman: Welcome. I think you know what we are about. We are trying to look at the film and television industries to see how they are progressing and what contribution they make both economy and culturally, and to see what government can do to improve that, if government can deliver it. It is a very complicated business and it is a question of what government can actually do. Training is obviously an important part, where government has always had a particular interest. Perhaps I could start by asking which skills are most in demand and which are most in deficit in the UK film and television industries?

  Ms Caine: We decided that it probably would be best if Kate were to field all the film questions and I were to field the TV ones, just to make things simple, so Kate will kick off on film.

  Ms O'Connor: The film industry is relatively contained in terms of numbers employed within the sector. Overall there are just under 30,000 people employed in the film industry and that includes people employed in the cinema and exhibition sector. If we are really focusing on the production side of the film skills agenda, about 10,000 are people employed across a huge range of different skills areas, from the highly creative through to the very technical and craft oriented. One thing I would like to say before I answer your question specifically is that Skillset over the last five years has worked in partnership with the UK Film Council and the industry directly, to put in place a film skills strategy which addresses issues from the cradle to the grave. Because some of the issues are not just about skills shortages but about making sure you have all the right kinds of people in the industry, that there is open access to jobs within the industry, that we have created a diverse workforce that really pulls on the talent for the UK, so our issues are not just about plugging specific skills gaps and shortages but making sure the industry is open and moves into it are clear. The kind of skills shortage issues that we have been addressing are increasingly a shortage of some of the craft and technical areas.

  Q1186  Chairman: Meaning?

  Ms O'Connor: Ranging from people who build sets, through to highly specific technical skills in the visual and digital special effects industry—and there is a global skill shortage of some of those skills—including compositors and artists in that sector.

  Q1187  Chairman: In the special effects industry, what kind of skills would you require?

  Ms O'Connor: In the visual and digital special effects industry that I have just talked about, there is that fusion of creative and technical skills and being able to come up with ideas/characters and then manipulate images and create these fantastic special effects.

  Q1188  Chairman: What would be the basic background that you would need to do that?

  Ms O'Connor: Lots of new entrants come through with degrees in animation, or sometimes in subjects like computer games development even, because some of the skills overlap, or some of them are coming from an arts background. The employees in the sector say that quite often they want those kinds of skills to cross the traditional subject disciplines, that within our universities we have quite demarcated departments, with science and IT in one block and animation and art in another, and the two need to meet in the middle. I have to say quickly that some of our courses are really grasping that. They are doing particularly well in Bournemouth and at the University of Hertfordshire; in Teeside; at Central St Martin's. There are some really good courses coming through with the support of Skillset and the industry feeding in their needs. It is that mixture.

  Q1189  Chairman: Would a person come to Bournemouth, say, with an initial degree, and then do postgraduate work, or would he or she go there initially?

  Ms O'Connor: It is a mixture. Lots of the animations degrees that we have accredited on behalf of the industry—we have Kite marked some of those degrees—are at undergraduate level, but then there are very specific specialist degrees at postgraduate level at Bournemouth, at the National Film and Television School, Central St. Martin's and other centres of excellence. We have created this network of media and screen academies where there is a real mix of undergraduate and postgraduate provision. That is the aim of the industry.

  Q1190  Chairman: If you were to delineate one area where there were skill shortages, it would be in this rather specialist area. Is that right?

  Ms O'Connor: There are definite skill shortages in visual digital special effects, so much so that we have had to register these jobs with the Home Office in terms of special arrangements for work permits and so on. That is a particular area of need, in the visual effects area.

  Q1191  Chairman: That means that we have to take people in from outside.

  Ms Caine: Yes.

  Ms O'Connor: Exactly so. Also, at the same time as doing that, we want to create our home-grown talent through our universities and schools and colleges. In other areas, it is more a case of keeping pace with the change in technology and the different kinds of working practices, and so our strategy is to make sure that our technicians and our crafts people can work within the new context of HD or use new types of camera equipment or whatever the particular issue is. Some of our work is about making sure that our continued professional development takes place with our existing freelancers, because 90 per cent of the industry are freelancers.

  Q1192  Lord Maxton: You have to do some forecasting, do you?

  Ms O'Connor: Yes, we do.

  Q1193  Lord Maxton: As to what the next trend is.

  Ms O'Connor: Yes, we do. Absolutely. In fact, as we speak, Skillset is refreshing the strategy for the film sector and we are calling in groups of employers and equipment manufactures and the people who are funding films and thinking through the pricing formats. We pull from that the implications for the skills of the workforce, so that we keep pace.

  Q1194  Lord Gordon of Strathblane: On this business of education and training in the Digital Britain report, I imagine you welcome very much ICT being a major building block in primary education, but there is a remarkable statistic which I must confess I did not quite believe that only ten per cent of those doing A-level computing are female. (a) do you think that is correct and (b) have you any explanation for it?

  Ms Caine: We certainly think it is correct because that information was supplied by the Sector Skills Council which deals with that area, which is e-skills. Certainly they do have problems in the ICT industry of attracting women and, indeed, of people from BAME backgrounds to work in the industry, so much so that they have specific initiatives to do with computer clubs for girls and so forth. Yes, that statistic is there and we understand it to be absolutely correct.

  Q1195  Chairman: Is there anything else you want to say about skills in film in demand?

  Ms O'Connor: There is a big issue about making sure that we have integrated business skills within everything we do. That has come through time and time again in conversations we have had with the industry and all of the representative bodies.

  Q1196  Chairman: We have had that in written evidence as well.

  Ms O'Connor: Then there is the issue I mentioned at the front end of my answer which is about ensuring that we have a more diverse workforce. The majority of the film industry is based in London and the South East. As I have said, 90 per cent are freelancers, and just one in ten of the workforce is from a BAME background—which absolutely does not reflect the workforce in London and the South East. That is something we really do want to address with the industry.

  Ms Caine: I would just add one thing on film, if I may, which is of course that it is also very, very important that we maintain our investment commitment to developing a creative talent—the writers, the directors, the producers and so on—because at the end of the day they are the major engine of British production, and obviously the kinds of areas Kate was talking about are also very, very critical for inward investment, from the American industry in particular, which is the biggest investor in the film industry. Turning to TV, in some ways it is quite interesting that we are talking about film and television as siloed industries, at a period when we are also looking at digital Britain and a growing emphasis on content creation which is available for multi-platform environments whatever they may be. Just some headline stats: about 55,000 people work in broadcast TV, cable and satellite and independent production. We are just in the middle of doing some work with Ofcom looking at changing skill sets for the industry and that has thrown up some very clear areas, one of which is multi-skilling, which can take a variety of forms. An example would be assistant producers now being able to self-shoot and self-edit. There is a lot of talk about t-skills, where people need to have an awareness of, as it were, the production processes across the piece. It is very important in this multi-platform environment, but then a specialism. There is a big need to maintain the core creative skills—very similar to the film industry. That is, as it were, what is commoditised. Particularly with independent television production, the markets in which they make their money are increasingly through exports to other territories, so it is that core creativity which is critical. There are craft and technical issues in specific areas, and we are very happy to give you more detail on this if you want it in further written work. Cross-platform skills are obviously very important now. Everything from technical skills, core production skills, management and leadership, particularly around exploitation of IP, legal rights, compliance and business modelling. Finally, there are specific gaps and shortages. We are an organisation that works across the UK. We work in the nations and we work in the regions. You will see definite differences in relation to geographic areas; for example, to take Scotland, basically with the BBC now growing network share and other things there is a real need to develop script talent there to drive some of the business coming in and some of the network possibilities. As I say, we have all the detail on this, so if you want us to draw down the detail we can.

  Q1197  Chairman: That is very kind. In a sense I started before I should have, so perhaps you could tell us in a few words what Skillset is and what it aims to do.

  Ms Caine: Skillset is the sector skills council for creative media, and our evidence shows which sectors that covers.

  Q1198  Chairman: Yes.

  Ms Caine: In effect, we work with and through the industry to make sure that we have the right people with the right skills and talent in the right place at the right time. As a sector skills council we are industry-led and managed, but we are also licensed by government in all four nations. We are one of 25. The licence which is issued by our regulator, the UK Commission for Employment and Skills, requires us effectively to demonstrate that we have full employer and industry support. We have to deliver in three key areas, one is providing detailed labour market information and skills forecasting on the needs of our industry, one is around the development of national occupational standards and qualifications, and the final one, which is the biggest and broadest and we feel has the most impact, is to work with the employers and workforces in our sectors to encourage attention to skills and investment in skills. Clearly within every sector the context will vary. For example, with us, because our sector recruits so heavily from higher education, we have placed a lot of time and effort into building relationships with higher education. That is who we are.

  Q1199  Chairman: To try to summarise your summary, you are working absolutely hand in glove with the industry itself. The industry supports you.

  Ms O'Connor: Yes.

  Ms Caine: The industry manages and leads us. In the industry are people who, as it were, go forward to say to Government, "We want this organisation to do the work that it is doing and we want this organisation to be licensed." All 25 sector skills councils have just been through a re-licensing process. Skillset was one of the first to have gone through that. It was an in-depth analysis, undertaken by the NAO. At its heart was checking with our employers that they support us and want us. As the Digital Britain report says, the outcome of that is that we have been found to be a sector skills council—and I quote without wishing to sound bigheaded—of the "highest calibre who commands the support of our employers."

  Q1200  Chairman: Did I not see in your evidence that you want an industry training board?

  Ms Caine: We do not want an industry training board.

  Q1201  Chairman: You do not.

  Ms Caine: The film industry wants an industry training board.

  Q1202  Chairman: You do not want one but the film industry does.

  Ms Caine: As an organisation, we have pursued the establishment of an industry training board because that is what the industry has said they want to do.

  Ms O'Connor: In film.

  Ms Caine: In film—just in film, to be very specific about that. As Kate says, it is a 90 per cent freelance workforce. The outcome of work that we did in 1997 on The Bigger Picture, which was the film policy review, identified skills as one of the key areas. We worked with the industry to set up a voluntary levy which we currently collect on behalf of industry, the Skills Investment Fund. It brings in about £750,000 a year on average, depending on production levels, and at the moment compliance runs at about 60 to 70 per cent. The industry saw the benefits of what the voluntary levy had brought but also did not want others to "free ride"—if I can quote—and therefore the consultation is taking place with the industry and the industry have said that they want to set up a statutory levy.

  Q1203  Chairman: I think I remember that this debate started in the 1980s and went on and on. I seem to remember when I was Secretary of State for Employment we had this debate.

  Ms Caine: Probably. There are only two other industries where there are still industry training boards, one of which is construction and one of which is engineering construction. Film is now wanting to join them. The thing that joins all of those three sectors is that they all rely mainly on freelance workforces.

  Q1204  Chairman: For the industry—and we are going to come on to funding in a moment—the great advantage that they see is that there would be a compulsory levy and no-one would be able to get out of it.

  Ms Caine: That is correct, because they all rely on a common pool of labour. In other sub-sectors that we deal with, absolutely they would not be going there, they would not be going anywhere near there, because they employ people and they have a direct relationship.

  Q1205  Chairman: Is not the disadvantage—and I am trying to remember 20 years ago—that you have a rather impersonal top-down approach rather than an industry, more committed approach?

  Ms Caine: Certainly your memory is correct in terms of what I understand, because it was slightly before my time, of how those large industry training boards worked. I would say two things. In this instance we have already operated a voluntary levy. The people who decide how that money is spent and where it is prioritised are representatives of the industry. They are working producers in the industry. The same will hold true when it becomes an industry training board because it has to be representatives of those who are in support of the levy. We are probably only going to be collecting about £1 million to £1.25 million. It is small. We already have a very well-thought through film skills strategy and we feel very close to that employer base. It was grants and paybacks and exemptions, and there seemed to be a whole bureaucracy around the old ITBs which I think we absolutely have avoided.

  Chairman: I remember that the construction industry training board had a training centre which was positively military in its approach. It took me back to my National Service.

  Q1206  Lord Inglewood: I would like to turn now to money and ask a number of discrete questions, which I hope do not sound too stupid, and then we will get a clear picture about your funding. You get cash given to you by the Government.

  Ms Caine: Yes.

  Q1207  Lord Inglewood: And ...?

  Ms Caine: Okay. We get cash given to us by the Government. We get a core grant of about £2 million to deliver our role as a sector skills council, so that is the same as all of the other sector skills councils. We then have contributions to our core activities for the broadcasters and from the film industry.

  Q1208  Lord Inglewood: Those are voluntary on their part.

  Ms Caine: Yes.

  Ms O'Connor: Yes, from the film industry and from the broadcasting industry. We then hold specific restricted funds, again for film and for TV, which are there purely for the purpose of investing in training delivery.

  Q1209  Lord Inglewood: Where does the money in the fund come from?

  Ms Caine: The money in the film skills fund comes from a combination of sources. One is the skills investment fund that we were just talking about, the £750,000 industry levy. The rest, £6.5 million for the last four years and £5.4 this year, comes from the UK Film Council and is Lottery financed. In terms of the training funds we hold on behalf of television, the picture is a rather moving one there.

  Q1210  Lord Gordon of Strathblane: Yes, and not in the right direction.

  Ms Caine: And a reducing one. Basically, in 2007-2008 all UK broadcasters and independent production contributed £1.5 million to our TV freelance fund.

  Q1211  Baroness Bonham-Carter of Yarnbury: Is that satellite channels too?

  Ms Caine: Yes. They have made some contribution. That has reduced in 2008-2009 to £1,335,000, and this year we are down to £745,000. Obviously I can give you the breakdown and, indeed, would probably highlight two key areas there for your attention.

  Q1212  Lord Inglewood: You do not "go out and earn money". That is not part of your brief.

  Ms O'Connor: We do not earn money in the sense of generating income but we do bid for project activity and we can bid for that project activity from a range of government agencies across the UK. Some of that money then is spent on delivering training, commissioning training, and some of the project money we bid for contributes to our core costs, in fact.

  Q1213  Lord Inglewood: When you say delivering training, do you train yourselves, or do you always get other people to do it?

  Ms O'Connor: We always commission third-party trainers, yes. We always get the money out to the expert trainers. We do issue bursaries as well, so chunks of our money from both TV and film go out to the individual so that they have a bursary that they can choose training from. But mostly our money goes to training providers, who can then offer the training at a vastly subsidised rate to freelancers in either TV or film or, where the skills cross over, both.

  Q1214  Lord Inglewood: You were talking about universities earlier. You do not do subsidised courses there, do you?

  Ms O'Connor: No.

  Q1215  Lord Inglewood: You merely discuss with them what they are doing.

  Ms O'Connor: Yes. Again I am afraid it is different in terms of the approach we take with film and television and the other industries we deal with. With film it is very different because the funding we have allows us to invest directly into further and higher education provision, and so for the last five years we have done that. We have set up this small number of screen academies, just to look at film skills, including institutions like the National Film and Television School, Bournemouth, the London Film School, the Edinburgh College of Art (Napier), Glamorgan and Newport in Wales and Ealing College and the London College of Communications. Those screen academies focus on skills, training and education, and we do fund some of their programmes to ensure that they are working more closely with the industry, doing outreach, talent scouting. We have all sorts of programmes that we help them with directly by giving them cash, and we also give students who could not otherwise afford to do a course bursaries so that they can take up that offer. With our wider work with further and higher education, we do not have that kind of fund, so we try to work with those colleges and universities, that is the majority, to improve what they are doing. Obviously this is where the Government comes in: working with agencies like HEFCE in England and the Scottish Funding Council, HEFQW in Wales and the Department for Education and Learning in Northern Ireland, to try go get them more funding for these very specialised and high level and highly needed courses in further and higher education. We do work with government to try to lever money into those courses.

  Ms Caine: On that, to come back to your well-observed point, our role is mainly as a broker and we bring to bear the employer leadership and influence to try to seek to influence the rest of the publicly funded education and training system, as well as, obviously, in this instance we have talked about the detailed money that we collect from the industry which we can invest directly.

  Q1216  Lord Inglewood: Presumably, such is the world that, looking forward, funding is going to get tighter rather than easier. Are you worried?

  Ms Caine: Yes, on two counts. To go back to the industry and TV, we are worried. It is very interesting, if you look at economy-wide reports that the UK Commission for Employment Skills have produced, they demonstrate that businesses which invest in the skills and talent of their people during a recession are 2.5 times more likely to grow and be healthy coming out of recession. That is the first thing. The second thing is that it would seem, talking to other sector skills councils, that in this recession some sectors are maintaining their investment in their redress to skills because they see it as important to what I have just talked about, and other sectors are finding it challenging. I would say that certainly our experience in this sector at the moment is that that perhaps is the case. If you look at TV, obviously you can take investment in ourselves as one of the indicators. It is obviously not the only one. I think that across the board you will find that broadcasters have over the past two years all cut their investment in training and skills. If you look at our figures and the money that we receive then obviously ITV has now cut us and the National Film and Television School. We have 100,000 transition on core funding in this financial year, but I also want to highlight the independent production sector because, thus far this year, they have only been able to commit about 20 per cent of what they normally provide. Also, I would point to the fact that in TV the biggest barriers are for freelancers and I think that is very interesting when you start to look at the breakdown in freelance use across the industry, because the independent production sector utilise that 57 per cent of its workforce as freelance compared to 26 per cent for the large broadcasters. We know—and I will not bore you with the statistics but we can provide them—that there are all sorts of barriers for freelancers, including employers investing in their training. When you look at the investment by employers in segments, then in 2008 in terms of our workforce certainly, although we cannot say in what area, 78 per cent of broadcast TV employees have received some training, and it is only 36 per cent in the independent production sector. That is quite a big difference.

  Q1217  Baroness Bonham-Carter of Yarnbury: Just picking up on what you were saying about the contribution made by broadcasters, is that largely by the free-to-air broadcasters?

  Ms Caine: Yes. We have some contributions to the freelance ones, £60,000 from Sky and the small cable and satellite companies it is £1,000 basically per channel, with a ceiling of five channels, but overall they probably contribute then about 150,000 a year.

  Ms O'Connor: Yes, that is the maximum.

  Q1218  Baroness Bonham-Carter of Yarnbury: ITV is not contributing anything, is that right?

  Ms Caine: No, as of this year. I think it is very interesting with ITV because, given that particularly recently it has obviously recognised that commoditising Britain's talent has a real way of delivering value, it seems to not be addressing investing in the industry's talent in the same way.

  Q1219  Lord Inglewood: Taken in the round, just standing back from the immediate problems you are facing, does the industry as a whole pull its weight financially in respect of training?

  Ms Caine: I would say it is a spiky profile. Some companies like the BBC invest heavily and continue to do so, but then of course they have specific obligations under the PSB. As a sector, I have to say that we are blessed in one way with attracting, if you like, the brightest and best, but also sometimes the oversupply of those people wanting to work in the industry can lead to a certain sense of complacency around the amount of active effort, investment and focus that needs to be made in terms of preparing us to maximise our potential in terms of the future.

  Q1220  Baroness Bonham-Carter of Yarnbury: You were talking earlier on, Kate, about how there were particular skills shortages in the special effects area, which I thought we were not so long ago pre-eminent in. Why have these shortages come about? What has changed?

  Ms O'Connor: In some ways we are victims of our own success here. We are seen as global leaders in our visual special effects and post-production facilities and we win lots of contracts in terms of that work, and therefore we need quite quickly, the top four companies particularly, to bring in vast teams of people to work on these quite complex movies and with very specific skills. That is when they need to pull in numbers at any one point and then obviously let them go when they are not working in a particular movie.

  Q1221  Chairman: They would be freelance

  Ms O'Connor: They would be freelance or on short-term contracts. We are making sure those skills are feeding through our higher education specialist school, our screen academy and media academy network.

  Q1222  Baroness Bonham-Carter of Yarnbury: You have talked a lot about higher education. What about at school? We have the games industry and they said if only they would tell girls and boys that if you learn maths you could make video games.

  Ms Caine: Yes, absolutely.

  Ms O'Connor: We are working on that agenda as well. Most definitely. There are certain things that we can influence directly, like we worked very hard to create this new creative media diploma, the new alternative to GCSEs and A levels that has been on offer this year, and that includes strands for animation, computer games development, and builds in science and traditional subjects with the more arts based subjects. Really importantly, we are keen, but there is a blockage in the system, to get that careers information through the schools, about the range of careers and the kinds of skills people might need, because it is not all about presenting, it is not all about the creative side. We need to make sure that people understand the business context and some of those science backgrounds.

  Q1223  Lord Maxton: Do you get any funding from the games industry?

  Ms O'Connor: No, we do not. No direct funding.

  Q1224  Lord Maxton: Even though they must benefit from what you do.

  Ms O'Connor: They do not contribute to our core costs and we do not have a similar fund in the same way that we did for film and television.

  Q1225  Baroness Bonham-Carter of Yarnbury: We have had evidence from Mr Fellner about the lack of business skills.

  Ms O'Connor: Yes.

  Q1226  Baroness Bonham-Carter of Yarnbury: Is there anything we can learn from abroad about doing better at developing business skills?

  Ms O'Connor: Yes. I am sure there are examples of some courses that build in that business context and some approaches to training that build in the business context in a far more integrated way than we are doing. But going back to film, the question was about the contribution to the industry and support from the industry. I think the film industry has shown incredible foresight to get involved in this five-year strategy and the move to supporting a mandatory levy I think is the ultimate demonstration of their commitment to skills into the future. On business skills, we had identified this as a real need of the film industry five years ago and we established a business academy which was set out to be one of the world leading examples of how to address business skills training for the film industry, and that is something we are still working on getting right. But we at that time and still are probably leading the way in having a very big focus in film business training on TV

  Q1227  Chairman: Is that Mr Terry Ilot?

  Ms Caine: Yes.

  Q1228  Chairman: We are seeing him next.

  Ms O'Connor: Okay. Stewart Till was very much the architect of that programme at the time and the establishment of the film business academy a priority for our film industry. I think that is something we do need to do more of in the TV industry. That is critical now. I think the Digital Britain report highlights just how important it is to equip everyone in the industry and all the people who are intending to come into it with that business context and that ability to think about monetising creative content and ways to do that.

  Q1229  Lord Gordon of Strathblane: It seems to me the training area is quite remarkable and perhaps unnecessarily complicated, with large numbers of people jockeying for receipts of public funds. In 2005, only four years ago, you say that you, together with the broadcast industry and Ofcom, set up the Broadcast, Training and Skills Regulator and yet—and I do not mean this unkindly—you now say there is a degree of confusion as to respective roles. With the benefit of hindsight, would you have like it to have been set up differently?

  Ms Caine: At the time, Joyce Taylor, who now sits on the Ofcom Content Board, had worked with us and the industry, and DCMS at Tessa Jowell's request, to make recommendations to Ofcom as to how to manage its responsibilities in terms of training going forward. The recommendation that was made was that there should be co-regulation between Ofcom and Skillset. However, at that stage Ofcom had just launched the Advertising Standards Authority and had particular rules. It has particular rules which it applies to co-regulation which means you have to set up these third-party bodies. I think some people observed that, given that training and skills is a complex area, not as high up the industry's agenda as perhaps as we would like, it perhaps becomes quite crowded and, also, as we said in our evidence, what has become clear during the course of this last year is that, for example, the clauses in the Act Ofcom now understand to not cover the freelance issue, which, as I indicated before, is one of the most challenging in terms of addressing.

  Q1230  Baroness Howe of Idlicote: Before I move in to a rather more specific question, perhaps I could follow up the point that Lady Bonham-Carer has been making earlier, particularly about contact with schools and the need for much more creativity coming out into your industry. Do you do any of this directly with schools or do you do it at second hand through helping design courses? Might there be a case for doing it a little bit more visibly yourselves?

  Ms O'Connor: We do not do it directly. We are not funded or resourced to do it directly. Until quite recently, officially we did not have a particularly strong role or remit for the pre-19 school-based education policy at all. It is only since the development of the new creative and media diplomas and industry-facing diplomas that we have had a role to inform what happens on courses, but no funding of resources to do direct work to engage the industry with schools. Having said that, and again on film, there are a number of agencies who do lots of good work with schools and we are involved with all of those bodies to help support their work. Media Box, with government funding, gives grants to disadvantaged young people so that they can develop their skills in radio or TV or computer game or whatever medium they want to explore, and there are organisations like First Light, and obviously there is the British Film Institute, and Film Education and Film Club, all of whom have the role and remit and money to have direct involvement on film education, but those kinds of arrangements do not particularly exist directly for the other sectors for which we are responsible. It is a gap in terms of our funding and ability to be able to do that.

  Ms Caine: In terms of the 14-19 diploma, we have engaged numbers of TV employers in terms of helping support implementation, including providing lots of work-related learning materials online and so forth. BBC Blast, for example, has done a lot to help roll this one out. We have tried to make information about the industry available to the careers advisors, but the difficulty, if we just talk about England, is that there is not an all-age careers service at the moment. It is very fractured and it makes, as it were, the sharing of information coherently to all those constituencies quite challenging.

  Q1231  Baroness Howe of Idlicote: Thank you very much. Moving on to more specifically, what really more could be done to support the supply and development of these relevant skills? I am thinking now about where the responsibility for this lies, whether it is with policymakers or where. Referring a little bit to our visit to Pinewood the other day, where we saw and heard that apprenticeships were really working in and going to be clearly a very attractive remit for young people if sold correctly. Having said that, the film industry itself, as opposed to the relevant practical skills, did not seem quite as involved as they might be in the actual apprenticeships. Is this an area that needs developing? Is this not one of the areas that might be made more attractive, particularly to girls, going back to that point about ICT and the lack of girls going into that industry? Do you have views on that for those industries?

  Ms Caine: In terms of the overall answer to the question, perhaps we could come back to you on Digital Britain, our submission to that and the recommendations that have come out of it specifically in terms of apprenticeships. Absolutely, I think right across the film and TV industries, there is more that we can do and should be doing to engage people in that being the route. Kate, perhaps you could talk about film and then I will talk about TV.

  Ms O'Connor: Yes. I am sorry that we are doing this sector-specific approach to answering your questions, but that is how we work with the industry. With film, I absolutely agree with you that there is huge scope for apprenticeships in the film industry, but because of the nature of employment in the film industry people are not employed for long periods. There does need to be this brokerage system, so that we can work with training providers—in this case the screen academy that we have that specialises in craft and technical training—to help organise those apprentices and place the apprentices on productions and then provide the off-the-job training when they are not working and back in college. We have spent a lot of time trying to get the model right and we are definitely convinced that it can be expanded, but sometimes our numbers are tiny compared to other industries. For example, the wider construction industry will have thousands of apprentices, and economies of scale make sense with government funding. Ours are small—we might be talking about a couple of dozen apprentices in Pinewood at any one time—and so funding to help support those brokerage arrangements, where it is critical to have someone organising those kinds of apprenticeships, does not exist very easily from government sources. That is where we are now, working with the industry and these training providers to put the key components together.

  Q1232  Baroness Howe of Idlicote: Given the apprenticeship side has money in this sort of area, surely more could be done with that.

  Ms O'Connor: Yes.

  Q1233  Baroness Howe of Idlicote: As combined with industry.

  Ms O'Connor: Definitely. The one thing to remember, though, with apprenticeships from our point of view—and government funding is available and is a huge priority—is that funding at the moment is available only to those who do not already have a degree or a Level 3/4 qualification, so you are talking about apprenticeship funding being available really for 16-21 year olds with maybe GCSEs and probably not A-level type equivalent qualification. There are very few grades in the industry where that is the typical age profile or that is the typical qualification profile coming in. The grades where it is suitable—the set crafts, make-up and costume, some of our other craft and technical areas—it tends not to be the answer for the industry as a whole because we tend to recruit at graduate level which is where the Digital Britain areas come in.

  Ms Caine: Exactly. Also, to pick up on TV, which is linked to my previous answer: as Kate says, there is a tendency to recruit people with higher education qualifications, which immediately rules out the normal old-style apprenticeship recruits. So that is a cultural thing, because when you look at it, a lot of roles in the industry do not need that and they could be definitely open to apprenticeships. In TV at the moment we are looking at how we can really work with employers to define what would be seen as "killer skills"—you know: "What would you really want young people to have skills in that would make a big difference to you?" Metadata management, at the moment, is one of those. We are trying to look at developing a digital media apprenticeship which embodies some of those things that people really want and need now, and hopefully, using that to help pilot and to get the industry to see that they do not always have to recruit at HE level.

  Q1234  Lord Gordon of Strathblane: A lot of small companies would insist that the best form of training is on-the-job training.

  Ms Caine: Yes.

  Q1235  Lord Gordon of Strathblane: How far do you go in providing a degree of accreditation for these almost informal training schemes?

  Ms O'Connor: We are looking at exactly that now. The rules of accreditation and qualifications as part of work have been relaxed, and so we are really exploiting that to look at ways in which we can accredit on-the-job training.

  Q1236  Lord Gordon of Strathblane: Coming back to this business of current powers, I rather get the impression that you wish you had powers to make sure that people volunteer to contribute!

  Ms Caine: I think we would like people to recognise that investing makes sense.

  Q1237  Lord Gordon of Strathblane: Yes, I follow that, but you do say that the powers are not sufficient to ensure meaningful dialogue. That sounds to me like "to ensure that they do start contributing". It is a problem, voluntary schemes.

  Ms Caine: Yes. Perhaps it would be good to ask Ofcom and BTSR some of these questions.

  Q1238  Lord Gordon of Strathblane: As well.

  Ms Caine: I think that perhaps what we thought the Act said and what they now feel the Act says are slightly different.

  Q1239  Lord Hastings of Scarisbrick: Just talk us through a bit more your reflections on the role of the BBC as the primary trainer/skills provider. They are your largest cash contributor.

  Ms Caine: Yes.

  Q1240  Lord Hastings of Scarisbrick: Some might possibly argue that if the BBC was not putting cash into organisations like yourselves it could do a much more enhanced job. It has the internal capacity for skills development apprenticeships and training internally. How do you respond to that?

  Ms Caine: I think under the Charter and the Framework Agreement, the latest one, it is very clear that the BBC has been given responsibilities to support its own workforce but—to use Tessa Jowell's term of "creative venture capital"—to take it to its privileged position, if you like, to ensure that it invests and works with the rest of the industry on these issues. The second thing is obviously the WOCC. Now that up to 50 per cent of their commissioning comes from the independent production sector, and they are therefore relying quite heavily on the supply chain, also demonstrates that in terms of their own business interests they need to be looking at practices outwith their own and potentially learning from those but also supporting schemes which provide industry-wide solutions. I think the days of the BBC, if you like, creating fortress BBC are long gone. It is a new business environment, it is a new industrial model. They recognise that, they are willingly embracing it, and they are working very effectively with us and the rest of the industry

  Q1241  Lord Hastings of Scarisbrick: Could you give us some examples of how you have you been working with the BBC on extending the reach of their skills

  Ms Caine: I know Peter Salmon came and gave evidence. One key area at the moment is the BBC move to the North. We are working as Skillset North and we have brought together the three Regional Development Agencies, the three Regional Screen Agencies and the industry—all of it, from computer games, interactive, through to advertising, film, TV. In the North, we have a very senior industry committee led by Tom Gutteridge from Standing Stone. That is working and has achieved co-ordinated investment, but it is working with the BBC to look at how, as it were, we can ensure that once they have identified who is going to move and who is not, there is local talent and skills available to meet their needs. Also, obviously that move should be, and is, I think, creating greater opportunities in other sectors in the North, so that we are also using it to try to ensure that the skills are there for those other sectors.

  Q1242  Lord Hastings of Scarisbrick: Is your impression that the BBC is being as diligent in investment in its own training for the North as it has been in the South?

  Ms Caine: It is absolutely a key priority. The partnerships that they have built for training and education providers in the North, and particularly the partnerships that they have developed, as it were, working through us, I think are a real priority for Peter and his team, yes.

  Ms O'Connor: Linking one of the previous questions on apprenticeships with the work the BBC have been doing, they have been a catalyst for saying let us take this issue of recruiting non-graduates and train them up under the Government's apprenticeship formal scheme and offer formal qualifications. They really are leading the way in that and helping us develop our approaches so that they might be models that we can scale out to the rest of the industry. Although the example of their work started in the North West and increasingly across the rest of the North of England, they are now working very hard with us to prepare schemes in and around the Olympics and to support apprenticeship training generally and to be real ambassadors for that kind of approach.

  Q1243  Lord Hastings of Scarisbrick: You are seeing no slippage in the BBC investment?

  Ms Caine: Not as yet.

  Q1244  Lord Maxton: Mark Thompson—and I only heard a snippet on the radio—was expressing grave concern about the whole top slicing. Do you think, if the BBC felt their funding was being threatened, that training might be an area they would look at?

  Ms Caine: I know that in the debate around the money for digital switchover, and what will happen to it or not happen to it subsequently, that training was one of the areas that Mark identified as being something that that money could be used to further enhance. I do not expect that to have an impact in terms of their current investment and commitment.

  Q1245  Lord Gordon of Strathblane: Is it not right to say that you would like PSB status to involve a commitment to training?

  Ms Caine: Absolutely right. That is where we are pleased with what Digital Britain has said, because, in a sense, as I say, the BBC Charter strengthened the BBC's commitment to training and training across the industry precisely because of that level of PSB commitment in the licence fee. Digital Britain has now restated that. It has restated its believe that PSB broadcasters should be committed to skills and talent and has also identified Channel 4 as needing to develop its activities in this area and the Government will be bringing Channel 4 and Skillset together to look, in the light of the revised focus it has, at that issue.

  Q1246  Lord Hastings of Scarisbrick: To move on to the area of new skills, new technologies, 3D, whatever the next phase happens to be, and you talked about the US being the dominant training provider and investor worldwide, how are you keeping in front of the game? Where do you get your research capacity from?

  Ms Caine: We were talking about the US being the major inward investor in the film industry rather than—

  Q1247  Lord Hastings of Scarisbrick: Taking new technology as a whole, how are you getting an enhanced picture on new technologies for training?

  Ms Caine: It is quite challenging, I have to say. In terms of the questions you have asked about future gazing, it is not really in the DNA of business in this country as much as it is in other countries to do that as a regular exercise.

  Q1248  Lord Hastings of Scarisbrick: It is so intrinsic to this business, is it not?

  Ms Caine: It is so intrinsic to this business. So we do, and obviously in every area in which we work we bring together leaders from the businesses, and it is to them that we turn to ask for their informed position, but we also obviously have connections across, with Ofcom and the research departments there and the research departments at the BBC. So we are networked into the various research bodies and then seek to do our best with our original soundings as well as then quite often willingly giving us their information to achieve the best picture we can, but I do think we have things to learn there internationally and I do think there are things we need to do to improve our ability to do that.

  Ms O'Connor: We have a relatively small research team and, although we are starting a futures research programme this year to collect that information systematically, we clearly need that international benchmark. We need not just to be talking to the key players in the UK but analysing this on a world basis.

  Q1249  Lord Maxton: How closely were you involved with the team doing the Digital Britain report? Are you reasonably content with what it proposes? Is there something else you want to recommend? What would you recommend?

  Ms Caine: Yes, we were very intimately involved with the Digital Britain team. When the interim report came out, the chapter on skills, I think Stephen Carter would absolutely recognise, was one of the least well-informed and therefore he commissioned ourselves and e-skills, the sector skills council for the IT industry, to produce a report. We duly did, and we are happy to make that available to you, and the Digital Britain report basically says that government has accepted that analysis, has accepted the recommendations that we made, which we are very pleased with. Those recommendations covered both talent pipeline and, as we were saying before, the need to move and invest in graduates coming into the industry, as well as new business modelling and so forth, and the setting up of digital hubs for cross- disciplinary work. That is great—the analysis accepted, the recommendations accepted. The difficulty we always come back to is investment, because although Digital Britain is the first example of both industrial and skills activism, new jobs, new futures—or new futures, new jobs—and I cannot remember which way round it is—where the sector's needs are supposed to come first, the evidence we submitted to Digital Britain also commented on skills policy. Skills policy and public funding are currently very tied to PSA targets which are focused on the delivery and support of low level skills. We were saying that, in high growth sectors, there should be incentivisation and support for high level skills, that, as it were, all sectors, all regions, all nations should not necessarily march to the beat of the same drum but should be allowed to march to the beat of different drums depending on the areas of need. That of course is the bit that has not really been acted on, because I think in terms of DES (now BIS) they are overspent on most of their budgets.

  Ms O'Connor: In a nutshell, we have been arguing for apprenticeships, yes, but also graduate apprenticeships. We have argued for on-the-job training schemes that look at the issue of diversity and just what qualifications people have before they arrive at those schemes. We have argued for specialist postgraduate funding: not in large volume, really targeted, high level world-class postgraduate programmes that need to be supported. All of that has found its way into the Digital Britain report and was understood by the writers and Lord Carter, as Dinah said, but we are concerned that it will not find its way into public policy or funding decisions unless it is really pushed now.

  Ms Caine: The Higher Education Framework which comes out at the beginning of July is a key policy document that relates to a lot of the recommendations that we made, so we will have to see what the outcome of that is. In summation, that is the public funding side of things. Obviously, also, we have discussed the industry's responsibility to invest in the future and the people.

  Q1250  Baroness Bonham-Carter of Yarnbury: You were talking about how the BBC has been very good about apprenticeships, but the evidence we received last week was that their internal traineeship schemes have been cut back. There is no post-production membership scheme any more. Is that not a rather negative step?

  Ms Caine: It is very interesting because in the run-up to the Charter and so forth—I cannot remember which one it was—the BBC's Green Paper of response, there was a commitment there that the BBC would not cut its investment in training. At that stage it invested about £57 million a year. I think if you were to ask them now you may find that it had reduced from that figure.

  Q1251  Lord Gordon of Strathblane: A very quick and I hope not too parochial point. Were there to be an ITB would we not be in a rather strange position that they had the power to introduce a levy only in England and Wales and Scotland would remain a voluntary levy under Skillset?

  Ms Caine: Yes, it is a strange position and it is all to do with devolution because at that point nobody ever thought about the ITB Act so the position we were in—and it was looked at at every level in Scotland—was that potentially the only way through was for the Scottish Parliament to agree to hand that power back, and the view was that actually ITB probably was not the best thing to have that very first debate on in terms of handing any power back to England.

  Q1252  Chairman: I think we might write to you about the employment figures because one of the things which is rather puzzling is getting accurate employment figures in this industry.

  Ms Caine: We do have them.

  Q1253  Chairman: Just one very last point on security of employment. Both in films and to a lesser extent in television, but still to a very substantial extent, freelance working is the norm. Is it possible to think in terms of more secure working and a more secure future? Is it a deterrent to people actually joining the industries in the first place?

  Ms Caine: In terms of TV, given the current economic climate and in terms of the levels of redundancies that are taking place and the reshaping of the industry that is taking place, whether or not it would be preferable to have more security, I do not see that happening. That is the first thing. The second thing is whether it is a deterrent. Increasingly—and I think that particularly in times of recession—the precariousness of employment in an environment where people are now much more inherently cautious will be something that they do take into account. It is no surprise if you look at the statistics on women in the industry that most of them disappear after about 40.

  Baroness Bonham-Carter of Yarnbury: Before that. When they have their first child usually.

  Ms Caine: If you are wanting to attract the brightest and the best then it is not necessarily the most attractive way of employing people.

  Chairman: You have been very good and given us some very excellent evidence. I think there are quite a number of things that we will want to follow up with you on that, but thank you very much for coming this morning.

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