The British Film and Television Industries - Communications Committee Contents

Examination of Witnesses (Questions 1254-1330)

Mr Dominic Davenport, Ms Sharon Goode, Mr Terry Ilott and Mr Michael Kuhn

24 JUNE 2009

  Q1254  Chairman: Let us begin. Thank you very much for coming. Michael Kuhn, you know what we are about because you have been here before. Your other three colleagues have not been here before but basically what we are about is looking at the film and television industries to see what proposals and suggestions there are to improve the industry and the way that the Government can take any action, if any action is available to them. Obviously training is one of the most important areas for any industry. Before we begin, because we have a bewildering range of talent in front of us, could you just say in a few words what your organisation does so that we can categorise you. Shall we begin with Mr Ilott

  Mr Ilott: Thank you, Lord Chairman. I am Director of the Film Business Academy at the Cass Business School. Cass is the business school of City University. The Film Business Academy has been going for about three years. It is still in the pilot phase.

  Q1255  Chairman: And you are business orientated?

  Mr Ilott: It is totally business.

  Q1256  Chairman: Ms Goode?

  Ms Goode: I am Director of FT2 Film and Television Freelance Training which was set up in 1985 initially by the film industry to provide apprenticeship-style new entry training in junior technical production and craft areas, in response to the growth of the freelance sector and the loss of traditional in-studio apprenticeship routes. We cover both film and television.

  Q1257  Chairman: And you specialise very much in freelance?

  Ms Goode: In freelance and we are a not-for-profit training organisation and a registered charity.

  Q1258  Chairman: Mr Davenport?

  Mr Davenport: I am CEO of a company called Escape Studios and we are a finishing school for the visual effects industry in this country. We provide a bridge between what goes on in academia and what goes on in industry.

  Q1259  Chairman: We were hearing in the previous evidence about special effects and I would imagine special effects and visual effects are the same thing.

  Mr Davenport: One is real and one is generated by a computer so not exactly.

  Q1260  Chairman: Do you get into both or not?

  Mr Davenport: No, it is all computer generated. Everything we do is what is known as computer graphics (CGI).

  Q1261  Chairman: That helps me if no-one else. Doubtless everyone else understood that distinction. How long have you been going?

  Mr Davenport: Since 2002.

  Q1262  Chairman: Michael Kuhn?

  Mr Kuhn: I am sorry I am here again!

  Q1263  Chairman: You are very welcome. We are on every Wednesday morning.

  Mr Kuhn: I am standing in for Nik Powell, the Director of the National Film and Television School, which is the best film school in the world. We have about 200 students in 13 disciplines and we do television and film training for post-graduates.

  Q1264  Chairman: And you are a school. Tell me more about how it is organised?

  Mr Kuhn: We are based in Beaconsfield in an old studio and we have 13 disciplines covering all sort of things like directing and screen writing and producing and cinematography, but also editing, sound design, special and visual effects, digital post-production and all that stuff. The two main industries we service are the film industry and the television industry and unlike most training courses our graduates whiz straight into work and straight into creative businesses for work. So we are not like someone who is doing an academic course which has no practical application, studying cinema in the 19th century or something like that. This is hands-on, bang out to their area and you are making The Bill or working on Harry Potter.

  Q1265  Chairman: How long do the students stay with you, so to speak?

  Mr Kuhn: In theory it is two years.

  Q1266  Chairman: In theory?

  Mr Kuhn: One of our first students was Nick Park of Wallace & Gromit fame who was notoriously there for seven years, illegally, but two years is the formal training.

  Q1267  Chairman: And if I were a student would I pay for myself?

  Mr Kuhn: Yes.

  Q1268  Chairman: So that means you cut off quite a lot of people potentially?

  Mr Kuhn: Potentially except we hand out £500,000 a year of scholarships both for fees and for living expenses. That is one of the things we are going to come on and talk about. The only reason that I and many of the other governors are involved is because we do not want to be involved in a school which is for rich middle-class children to do something while they think what their career should be. It never has been that sort of school. It has always been open to talent irrespective of means, and we want to maintain that.

  Q1269  Chairman: What age do your people come in?

  Mr Kuhn: The average age is 26.

  Q1270  Chairman: So they are post-graduate probably?

  Mr Kuhn: Yes. I am not entirely up-to-date, but roughly they arrive with £10,000 or £11,000 of student debt from their undergraduate days.

  Q1271  Chairman: And you add to it?

  Mr Kuhn: We add to it but we try to add as little as we can. That is part of the deal.

  Lord Gordon of Strathblane: Can I chip in one point on the funding bit.

  Q1272  Chairman: Can we come to that in a moment. Let us just get the introductions done. Mr Davenport, just tell us a little more about you.

  Mr Davenport: My background is I came out of the visual effects industry myself and I was an animator and visual effects artist. I worked in that region for about six years. I set up the school because of my career path. I had come out of studying fine art at Chelsea and tried to get into the industry, and it was almost impossible unless you had done one or two degrees to get into the industry, so there was an obvious opportunity. I raised the finance and started a business. It was a very small school. We have grown over the years and we are now teaching about 500 people from all over the world who come to us because we are a centre of excellence and we have expertise and experience that represents what is going on currently in the industry. I think that is the reason we exist really because the majority of universities in this country are not able to keep pace with the advancements in technology and the way in which production techniques and workflow are changing on a weekly or monthly basis. So we act as a route for a lot of people who come off the back of degree courses with no chance of getting a job and accelerate their learning and push them into an industry with dedicated recruitment teams and partners in the industry. We work with all of the major players across the visual effects industry to build what they want at the right time with the right skill-set.

  Q1273  Lord Gordon of Strathblane: Can you guarantee jobs at the end of the day?

  Mr Davenport: No because we are a privately owned company. We have help from Skillset but other than that we have to charge for our courses to exist and therefore we have to take all-comers.

  Q1274  Lord Gordon of Strathblane: What is your success rate?

  Mr Davenport: I would say that out of the people who come to us who want to get a job rather than just doing it as a hobby we probably place 80 per cent of those people in careers and that is across film and television.

  Q1275  Chairman: Ms Goode, tell us a little more about yourself in the same terms.

  Ms Goode: We recruit people. We do not look for any formal qualifications. Having said that, 80 per cent of the people that apply to us have already got degrees, often in vocational film and television at BA level. We are equally interested, if not more interested, in trying to get people 18 plus to work on certificate 18 material, who have maybe done City & Guilds sound engineering or perhaps have come through one of the independent training providers, who are community-based and who access people from diverse backgrounds. Right from the beginning we have had a very strong remit from the industry to help improve the diversity of the workforce.

  Q1276  Chairman: Thank you. Everyone says that there is a great shortage of business skills particularly in the film industry. Is that your impression?

  Mr Ilott: Yes certainly. The Film Business Academy was started by Skillset. Kate and Dinah, to whom you have just been listening, were very instrumental in that, the perception being that there was a huge dearth of business skills in the industry. So the Film Business Academy runs a film strip on our executive MBA programme at Cass, which is a world-ranked programme. We run a film strip on our MSc management programme. We run various short courses. We are planning to introduce a post-graduate diploma in the Master programme to make rather more vocational business education available. Our courses are very expensive. The MBA is £39,000 and it is two years part-time.

  Q1277  Chairman: Who pays for that?

  Mr Ilott: So far of the students we have had they pay roughly 50 per cent of the fees out of their own pocket and the other 50 per cent is a combination of Skillset bursary funding and arrangements with Cass, because Cass has a very special deal for film industry students. Roughly across the piece it is about 50 per cent.

  Q1278  Chairman: So you have got to be pretty dedicated or pretty rich?

  Mr Ilott: Extraordinarily dedicated. The MBA students are themselves in employment. Their average age is probably 34. They are in the film or television business mostly. There are a couple of people from radio and outside but they are already working in the business. They have got a lot of business experience in film and, yes, they are extremely dedicated.

  Q1279  Lord Maxton: Do their firms pay for it?

  Mr Ilott: I think out of the film cohort probably only one. In other cohorts we have more sponsorship.

  Chairman: I suspect that we are going to find it quite difficult to get common replies from you all but we will try and get some strands anyway. Lord Inglewood?

  Q1280  Lord Inglewood: What I would like to do is to ask each of you to slightly elaborate on some of the points you have made already. If I could start with Michael Kuhn. You have explained that those who study at the National Film and Television School pay and you provide bursaries, so presumably all is on an even keel for as long as (a) enough people want to come and (b) the bursaries cover those who cannot afford it themselves. Is that the sort of model which it is based on?

  Mr Kuhn: As usual with anything in this country, it is an incredible hodgepodge. Originally we were funded by the Eady Fund which David Puttnam was talking about. Last year we had 13 different funders. You can imagine that servicing those funders is quite tricky and that is what the school has to deal with, but the bulk, 40 per cent, comes from the DCMS. Then we raise about 13 per cent ourselves and between us and Skillset and then we get about 16 per cent from fees from the students. It is a whole hodgepodge of things. Also I should mention that like most of the higher and further education industry the international students, ie non-EU students, pay more than the domestic students. I think that is widespread across the higher and further education landscape. We see it as our major objective to try and not allow means alone to stop people coming.

  Q1281  Lord Inglewood: But given the various funding streams and so on, it must be a bit of a worry with the world's economy in its current state?

  Mr Kuhn: It is a big worry and like all these bodies you spend your time trying to break even, which we have managed to do in the seven years that I have been there, but it is going to be incredibly difficult going forward. We want to build on our success. For example, we would like to expand into the games industry and be a centre of excellence like we are in film and television for games. We do not really have a centre of excellence for that in this country. One of the points I would make is that government has to start prioritising things in the funding of higher and further education. It cannot be that they do not take an interest and say we do think that film and television and games is a really high priority. We need to find the money, whether it is out of HEFCE, out of Skillset, the Lottery, or any of the various funding bodies to give them the money they need. We already are very self-sufficient—we have built a new building for £8 million without any government money, we have doubled our student numbers, we have raised our student fees—and we do not look for handouts, but I think there comes a point where you have to say if we are a priority (which I believe we are) the Government has to find a way of supplying the funds. We are not talking large sums of money. We are talking about a few hundred thousand pounds to put us on an even keel and that is really important.

  Q1282  Lord Inglewood: Mr Davenport, you are obviously set up differently. I understand that it is a private organisation and again your income is derived from the fees you charge.

  Mr Davenport: Absolutely.

  Q1283  Lord Inglewood: If for whatever reason the market will not generate fees then your business is under stress.

  Mr Davenport: Yes, I suppose, in direct response to that, the number of people who are applying to come on courses with us has gone up because we have seen a dramatic increase in the volume of people who are looking to get jobs specifically in the visual effects industry. Because of the tax breaks in this country and because of the volume of work that is coming in because of the dollar being so strong, a large number of films where the post-production would not ordinarily have been done in the UK are now happening here and that is driving a need for a large number of people to enter that industry. Companies within the visual effects industry are looking to America and to Europe and to Asia to find alternatives because the talent is not here.

  Q1284  Lord Inglewood: Do you offer scholarships?

  Mr Davenport: We are not able to. We offer some ourselves on an ad hoc basis to people we think really deserve it and we do not charge them anything but we also work with Skillset and some of our courses have been fully funded by them.

  Q1285  Lord Inglewood: Are employers sending people to you?

  Mr Davenport: No.

  Q1286  Lord Inglewood: It is below that?

  Mr Davenport: We are providing people for them, absolutely, but also in response to the worry about smaller fees, we have generated an on-line version of the school which allows people across the country and outside of the UK to access the skills and the expertise that we have through the internet.

  Q1287  Lord Inglewood: Do they pay for that?

  Mr Davenport: You pay for that as well but obviously it is a lower cost of entry.

  Q1288  Lord Inglewood: If I could move on to Ms Goode.

  Ms Goode: We do not charge fees. We actually pay the trainees a training allowance of £230 a week to enable them to live in London. We are targeting people who could not afford to support themselves.

  Q1289  Lord Inglewood: Where does the £230 come from?

  Ms Goode: At the moment all of the funding is from the industry. The majority is through Skillset's TV Freelance and Film Skills Fund. We have 29 trainees on a 44-week programme at the moment which costs around £25,000. £20,000 is through Skillset and the other £5,000 is from either direct contributions from production companies or in-kind industry support.

  Q1290  Lord Inglewood: Do you anticipate this state of affairs continuing? I know Skillset is sitting behind you.

  Ms Goode: It has shrunk. Five years ago we had what was known in the industry as the Rolls-Royce model which was a two-year all-singing all-dancing course. That cost between £40,000 and £50,000 a person. We have shrunk this year to 44 weeks and I think it will be shorter next time, which does give us concerns in terms of hitting our diversity targets because there is always that tendency that you recruit people at higher levels if it is a shorter scheme and we really do want to keep our remit open for people with less experience and fewer contacts.

  Q1291  Lord Inglewood: I sense from the nuance of what you are saying that actually you are concerned?

  Ms Goode: Put it this way: our scheme ends at the end of July and as of today I have got no funding from August. We will be going into reserves. That is an on-going problem. Five years ago and before that we were always very successful in using the industry funding to draw down public matched funding. We had a big ESF national project, we had lots of projects through GOL[25] and we had small projects through LSE co-financing. More and more that became narrowed in terms of the criteria of those funding bodies and the sorts of people we could recruit. It is targeted at people furthest away from the labour market with no qualifications. Most of the people that come to us to be trained as freelance need to be a stage further than that. They need to be focused. A lot of them are higher educated. We do not look for it but they are. The people that the industry recruits do not fit that very tight remit.

  Q1292  Lord Inglewood: Is it principally a problem of the criteria for those who are seeking matched funding rather than those who might offer matched funding being unwilling to produce it?

  Ms Goode: We have never had the problem of industry matched funding. The problem that we are going through is not being able to access the public match.

  Q1293  Lord Inglewood: Finally to Mr Ilott, in terms of your customer base it is slightly different I suspect.

  Mr Ilott: It is. Our situation is somewhat different because we are a department of a university so it is a very different setup. What I would like to address is the fact that Cass is a research-led business school and the Film Business Academy is going through something of a change to emphasise our own contribution to research, of which we have not done any, in a structured way. Research-led schools have a completely different economic characteristic to training programmes. It is partly why our fees are so expensive. Part of the change we are going through at the Film Business Academy is to put more emphasis on research because we believe there is a need for it. I was interested to hear the conversation you had earlier with Skillset. I think academia has a lot to contribute towards research so long as it is orientated towards practitioner needs, which I think we can do. The other reason is our teaching, because if it is not derived from original research, quickly becomes teaching yesterday's models and in the current digital environment yesterday's models wear out very quickly. It is something we need to do for pedagogical purposes. Part of that is widening the brief of the Film Business Academy to include all the creative industries, which is something we are discussing doing at the present time, to widen what we do. Part of that means widening our funding base. If I can characterise that: the first cohort of MBAs we had who are now just finishing and will graduate this year, when they came on board the MBA programme was £35,000. Cass put in 11, Skillset on average put in 12, and the students on average put in 12. Compared to the NFTS and Michael's position it is a very simple funding arrangement. Going forward we expect to have far more public sector funders and NESTA and so on, and Skillset's contribution will be proportionately reduced going forward. I do not think we are hugely anxious either about students coming forward or funding. I think our expectation in terms of volume is relatively modest.

  Q1294  Lord Gordon of Strathblane: Could I start off with Mr Kuhn perhaps and the funding problems of the National Film and Television School. You say a new funding model is urgently required. Do I presume that you would impose a compulsory levy on the industry?

  Mr Kuhn: I am not a great one for compulsory levies. What I would do is support what is laid out in the Digital Britain report and what I think I overheard earlier on that certainly the public service broadcasters should be compelled to support it. That is much more appropriate than compulsory levies which do not take account of what market circumstances are. Part of the reason why we are in big trouble this year is because, without any notice at all, Channel 5 and ITV withdrew funding to the tune of half a million pounds which is very hard to cope with.

  Q1295  Lord Gordon of Strathblane: That is fully understood but for the avoidance of doubt you would have a compulsory levy on ITV since it is called a public service broadcaster?

  Mr Kuhn: Is it, I do not know, I am confused!

  Q1296  Lord Gordon of Strathblane: If it wishes to continue to derive the benefits of being a public service broadcaster you would have a compulsory levy on it?

  Mr Kuhn: Whether you call it a levy or not but anyway an obligation, absolutely yes, because you just have to look at the back of our submission to see every single week the number of programmes that are produced with our graduates. We are effectively their training programme and it cannot be done for free; they should contribute to it. I fully understand that they have got tremendous difficulties because of what is happening in the market-place but either you are in the business or you are not and if you are in the business and you are given a privilege involving a public service remit, then you have an obligation to support training.

  Q1297  Lord Gordon of Strathblane: Before coming on to my next question I wonder if I could ask Mr Davenport to elaborate on his on-line courses.

  Mr Davenport: We teach a full range of courses that teach the skills that are necessary to enter the visual effects market, the games market, the design and visualisation market and television and commercials market. We have taken those and we have turned them into video content and created a system that provides a social learning environment so that people are studying with mentors and tutors on-line. That system is being bought by universities across the country to supplement their learning experience, because their ability to spend time with the students and give them vocational skills-led training is being removed, because I suppose they are being pushed toward generating research and the funding that is available to them is more in that place than it is in being able to deliver that kind of skills training.

  Q1298  Lord Gordon of Strathblane: Is there any scope for the National Film and Television School to do something of that nature?

  Mr Kuhn: We have examined it a lot. It would be easy to set up the technology to do it but the problem arises if you are doing, with a limited number of staff, a very intense, very crammed two-year course. To free them up to do what I think is an essential part of on-line which is to have one-on-one with the tutors, they just do not have the time. They would have to write the courses, implement them, keep the standards up to a very high level, and it is a matter of priorities and our priorities are our 200 students there for two years of crammed work with people who are practitioners and teachers as well, so that is really what has stopped us getting into that, after a lot of research and thought about it.

  Q1299  Lord Gordon of Strathblane: I fully recognise that a centre of excellence like the NFTS is very important for the industry as a whole, but a large part of the cost for a student outside the immediate South East area must be the student accommodation costs of attending courses?

  Mr Kuhn: True.

  Q1300  Lord Gordon of Strathblane: If you could get that money channelled into providing you with more tutors to do an Open University-style course.

  Mr Kuhn: Yes, absolutely, it is all to do with the resources. If we had the resources we could have more staff. We are just looking at our resources now and we are just about keeping our heads above water and to say we will divert staff to do the servicing required is very problematic for us.

  Q1301  Lord Gordon of Strathblane: What in the way of modular teaching do you do as well as the full courses which obviously is the main business of the school? Would you provide accreditation for modules provided by individual employers?

  Mr Kuhn: We have a short course unit which is very active and one of the best in the country and very popular. They do both individual training to upgrade your skills to whatever you want to upgrade your skills to for the independent sector but we also do bespoke courses. For example, we have done one for Sky for their presentation on the television side. We do a course with them to help them develop presenting skills and news reading skills and all that kind of stuff. We do both in that regard and we have always looked on our short course unit as a very important part of our work of servicing the independent sector which, as you know, is so big in our business.

  Q1302  Lord Gordon of Strathblane: How much do you consult with the industry about the structure and content of courses?

  Mr Kuhn: A tremendous amount. They are involved in the creation of the courses, in the validation of the courses, in the assessment of the students, in the admissions process. Practically every bit of it is staffed and involves the industry at all kinds of levels, both the business side and the creative side.

  Q1303  Lord Gordon of Strathblane: My final point would be that, rather as medical schools only train enough doctors for employment later on, do you have regard to employment opportunities in the number of students you accept?

  Mr Kuhn: We probably do not do as great an analysis as we should do, but I would say, generally speaking, in this country when you look at the items you have been looking at—and reverting back to my evidence when I was last here—first of all, Skillset have done a fantastic job of bringing together an overall view and we rely on them for a lot of the information that you were just mentioning. I think their role should be expanded and their resources increased but, having said that, equally important, and even more important to this whole training question, is where are the jobs? I said last time about the Film Council that they must spend more time worrying about where are the jobs and the sustainable industry that we need to have. I was listening to Dominic just a moment ago. Our industry should not be dependent on whether the pound is strong or weak. That is not a good way of setting up an industry. Our industry should be because we have great talent and we have great companies here to hire people and to need people all the time and are strong enough to be able to deal with ups and downs in the exchange rate. That is really what we need. That is really the other side of the coin of training. I think we have made tremendous strides with the help of Skillset thinking about the industrial infrastructure that we have here. In games, films and television it is bad and that is really one of the major issues we have to face.

  Q1304  Baroness Howe of Idlicote: Again a general question for you all on the demand for and the supply of relevant business and technical skills. I take the point entirely about the fact that we are in a bad moment at this time but to what extent does that compare with what is happening in other countries? How do we compare in that way?

  Mr Davenport: I suppose on my part, in terms of what my company delivers by way of training for the visual effects industry, we are at the very top of what is delivered across the globe. The major problem in this industry is that the intellectual property is not generated in the UK. It is coming from the States or it is coming from Japan or it is coming from forces outside of the UK so we are not masters of our own destiny. That is deviating slightly but that is what I would like to say about that. An interesting place for delivering these sorts of skills, if you look at France and Germany, if you look to the major studios like Pixar or Dreamworks which are in California in the States, they are extracting students from courses there that are completely funded by the government. There is one school called Supinfocom in France and one called Filmakademie in Germany where they are given probably the best visual effects and animation training available in the world.

  Q1305  Chairman: I know you said in Germany but whereabouts in Germany?

  Mr Davenport: It is in Baden-Württemberg. Supinfocom is in the South of France. I cannot remember exactly its location. They are completely funded and they are based on generating people who can sustain an industry within that country, even though they are then exported by the likes of Dreamworks and Pixar who obviously see the skills and the expertise that is there and see that it is greater than what is going on in their own country.

  Q1306  Baroness Howe of Idlicote: When you said earlier that 80 per cent of the people you train get jobs, you are referring to right across the globe then, are you?

  Mr Davenport: Yes.

  Q1307  Baroness Howe of Idlicote: Are you saying that compares very favourably?

  Mr Davenport: I would say so.

  Ms Goode: Our area is very much freelance film and TV drama technical craft areas, and in terms of where Britain stands in the world. The reputation of those crews is still very high. Those crews as individual freelancers are on the whole very committed to training the next generation. The people we train we are putting them in alongside assistant level people and the way that the industry recruits freelance, what is important is what productions they have had experience on and who is training them, and it is that word-of-mouth thing. I think to keep that standard of the reputation of British freelance crews and to continue to be attractive to American productions, it is not a big sector but you need to drip feed across all departments people in at the bottom particularly from diverse backgrounds.

  Q1308  Baroness Howe of Idlicote: This applies to you all. Are you really saying, despite the fact we have heard that other countries are really paying for the basic training in these sorts of skills, and you may be building on them, as it were, still you think that we are doing a better job or are you really saying that the Government and others should be doing far more?

  Ms Goode: With more money we could all do a much better job. I think there is the commitment within the industry to training but it is very hard to fund. With an industry that is cyclical in production, up and down, you can have a year when very little is in production, and we know what is happening in broadcast, it is cutting back, that is a challenge. It is a challenge in terms of the creative industries and the impact they have on viewers because what we need is high-quality content produced by people from a variety of backgrounds to keep that cultural thing up. I think that needs public support.

  Q1309  Baroness Howe of Idlicote: Still what is going through my mind is given that this is such an important area and growth industry etcetera, why is it that other governments are doing it and ours is not if it is so important?

  Mr Kuhn: It has to be borne in mind that there is a big distinction between the high-end digital post-production and computer graphics. We started our course a few years ago at the Film School and the first problem was we could not keep the students to finish the course because they were being stolen halfway through the course by the big special effects companies. There is such a demand, it is such a booming thing. You do not have to be an expert to think about computer games. Every ad you see on the TV, films, the computer graphics and special effects side, the high end side is so booming that it is not surprising that it is a world on its own. If you think about the lower end like a crew going out to shoot a documentary (which used to have a bigger crew and now there is almost no crew and so on and so forth) that is a much more tricky area, so it is two worlds.

  Q1310  Chairman: We say it is a growth industry but we have some evidence from the UK Film Council which appears to show that since 2001 there has been a really quite appreciable drop in employment inside the industry on film and video production. Is that your impression?

  Mr Kuhn: Yes, but then I am saying to you that this bit of it is a different world. There is a bit of it that impacts on film and television but there is a huge amount of high-end post-production digital and special effects which has nothing to do with film and television; it is to do with the games industry, the advertising industry and all kinds of other industries that are nothing to do with the film and television industry.

  Q1311  Lord Maxton: And are also international?

  Mr Davenport: Yes it is international. It is a global freelance market.

  Q1312  Lord Maxton: The skilled people you train, do they go abroad?

  Mr Davenport: Yes.

  Q1313  Chairman: What do you feel about Baroness Howe's point on that last question?

  Mr Davenport: Do we do this as well as other people? A private company like mine could not exist if we did not do it well enough. That is what I would say. We are doing something because there is a massive gap in the skills that are being generated by mainstream education. They move too slowly. They are not able to fund things properly. They are not able to attract the level of competence in their tutors to deliver what is necessary. There are probably two universities in this country that do it properly.

  Mr Kuhn: It is allied to the industrial base. Last year we ran a course for the Film Council for producers and I was with them in Los Angeles last year. We went in to see Dreamworks Animation in Glendale, who obviously make the big animated features. There were a thousand people coming to work every day there who do nothing but computer-generated animation. If you are in the training side of the business not to have such an entity here is a tremendous disadvantage. I am sure you would agree that to have our school next door to Dreamworks Animation would be such an incredible thing but we do not.

  Q1314  Baroness Howe of Idlicote: That perhaps answers some of the points but I wanted to hear from Mr Ilott because, after all, people are going on your courses and maybe they are just doing it for interest but they pay one heck of a lot of money.

  Mr Ilott: They certainly do not do it just for interest. In answer to your original question the Film Business Academy is unique and the evidence in support of that claim is that our students on the MSc management programme have been drawn from 13 countries and overall we have drawn students from 23 countries. On our executive MBA programme we have students flying in from New York on a monthly basis to do the programme. We held an academic conference last week which attracted 32 leading academics from 15 countries in Europe and all over the USA. I think that is because the Film Business Academy idea as an idea is a unique one and it has attracted a lot of global interest. However, the business skills that we teach are mostly generic. There is only a stream on the existing MBA programme because 80 per cent of what you need to learn is generic to business. From that point of view I think we are a long way behind. Business education is far better understood by employees and employers in the USA than it is in the UK and it is far better understood in certain business sectors in the UK than it is in the creative industries. We have a real problem in terms of business education that the industry itself does not have much respect for higher education of any kind and certainly not for post-graduate business education. I would agree with what Michael Kuhn said earlier that if the sector is so important and if, for example, the issues raised by Digital Britain are so important then the resources being put towards this are almost derisory. One of my big criticisms of the Carter Report is that the sums of money involved for training Digital Britain seem to me derisory.

  Q1315  Baroness Howe of Idlicote: What you are really saying is that the lessons to be learned have not yet been learned by the people involved. What more could the companies involved in this country be doing? Should they be doing more with contributing towards things like apprenticeships and internships and things like that and how can all of us encourage them to wake up a bit to the competition?

  Mr Ilott: If I could answer that on the business side, certainly in the film business most people in positions of authority today got where they are by hard graft, by talent, and by taking enormous risks with their lives, and if that was good enough for them why should everyone else go not through the same. Unfortunately I do not think that that answer is the right answer. There is a considerable cultural resistance to business education in the industry amongst those people who are in positions of making decisions. That can easily be changed. The example I would give is Universal, which is a major American studio which has a big office in London. When they were acquired by GE Capital, they acquired along with a new owner a whole new attitude to training and staff development. GE puts a lot of emphasis on staff development and all of a sudden Universal are being asked "Where is your staff development plan, what training and education are you providing for your people?" We have a dialogue going with Universal as we have with uCinemas and with others about how we can contribute to their new found enthusiasm for staff development. I do not believe that would happen were it not for the fact that a new company bought them and that new company had a much more developed and sophisticated sense of how to develop and retain staff.

  Baroness Howe of Idlicote: So it is really market forces.

  Q1316  Lord Maxton: Could I come back to that point I was making about it being international because we have tended to talk about the TV and film industry but the games industry, although it may not be as strong as we would like in this country, does exist and presumably you, Mr Davenport, are training people very much to work in that games industry?

  Mr Davenport: Yes.

  Q1317  Lord Maxton: But they told us you cannot produce a game which you can pay for which is based in this country and only sold in this country.

  Mr Davenport: No.

  Q1318  Lord Maxton: In other words, it has to be an international market?

  Mr Davenport: Yes.

  Q1319  Lord Maxton: What percentage of your graduates, shall we call them, actually move and work abroad at the end of the course?

  Mr Davenport: I think there is a question of apprenticeship in the UK and then once they have one or two years' worth of experience they will disappear, off to the States or other areas like Canada.

  Q1320  Lord Maxton: They are paying in your case so it does not matter quite as much but if the state were involved in paying then there would be the argument, as there always is with the doctors, why would you train a doctor who is then going to go and work in the States?

  Mr Davenport: Yes, I think again forces are at work because a lot of the games studios in this country have been acquired by people like Microsoft or large American organisations and they are not in control of their own destiny, so they are also looking at the costs of generating these games because the price of a game has stayed the same but the number of people that are involved in producing them at that level of detail and content has gone up dramatically. So they are looking at staffing resourcing issues and looking to develop in places like China, India and Korea where there are large groups of highly trained but cheaper people to do the grunt work and the intellectual property and the creation of the ideas is all from the UK. So the model is changing, I think. I would imagine you will see only the high-level work for the games industry going on in the UK and the rest being farmed out to cheaper locations.

  Q1321  Lord Maxton: In the film and TV industries how much of the work that you do in terms of computer generation is beginning to overtake some of the skills that are at present there in the film and television industries? The building of sets is an example. How much can you now generate of a set?

  Mr Davenport: I would say most of it is being done digitally. Directors are able to fix it in post, so to speak, so they shoot whatever they like and then it all goes to the post-production facility and they are given the job of fixing a lot of the work as well as adding sets and fixing a lot of the problems that they would have ordinarily thought about earlier on and built sets, all that sort of stuff. I can see a shift in emphasis for the industry as a whole.

  Q1322  Lord Inglewood: This is a question principally for Mr Ilott which is if you look at the business pages of a newspaper you see how great business leaders one day are leading a company that makes milk bottles and the next day leading a company that makes motor cars. Are the people on your courses people who want to be successful business people, who think that the film and digital industries are the places to go, or are they people who are interested in film and want to hone up their business skills in order to become captains of industry? It may be, Mr Kuhn, you will have something to say about that aspect.

  Mr Ilott: From our point of view it is definitely the latter. If people wanted to be successful in business I do not think they would choose the film industry as their preferred route. Nearly all the people we get on the MBA programme are already in the business. On the MSc programme they want to be in the industry and our short courses are delivered mostly to companies. The people that we are teaching are mostly vocationally oriented and very committed to working in film (film being widely defined).

  Q1323  Chairman: I am going to ask each of you just one last question. Our only status is to report and to make proposals to government. We can review the whole industry and we can conceivably say interesting things about it but our power is to make proposals to government. What would your number one priorities be? When I say number one priorities, I mean the number one priority of each of you as far as government policy is concerned? Who would like to start?

  Mr Kuhn: I think it is really a matter of prioritising available funding for training for this sector. At the moment it is not prioritised. Skillset have done a great job and they should be given more money and be encouraged. At the Film School we like to think we have done a good job. We should tell HEFCE they need 500 more a year; give it to them.

  Q1324  Chairman: We are talking about £500,000?

  Mr Kuhn: Out of a budget of £7 billion it is not exactly going to break the bank. They are always pleading poverty but every five minutes you get another initiative and they find £20 million here and £8 million there and £12 million there. If they do not have the money the Government should find the money. Thirdly, which is all part of the same thing, it absolutely should be without doubt an obligation on public service broadcasters who are paid for out of the licence fee and public money to bear a large part of the burden of training costs. That is about prioritisation. It just needs someone to take a look at it and say "This is ridiculous, we want this sector to be a mainstay of this country". We are not talking about huge sums of money and across the board we should prioritise it to give the resources for this to happen. I would be amazed if anyone on this table did not agree with that simple proposition.

  Q1325  Chairman: That is a challenge. Mr Davenport?

  Mr Davenport: I would come at it from a different slant. I would say the problem with education in this country is that the majority of organisations involved are not run like businesses. They are not made to take responsibility for the way in which they conduct themselves and think logically and cohesively about the way in which they are generating money to be able to do these things themselves. We have a lot to learn from America from the way in which a lot of their private schools are run. They deliver the very best education across a whole set the fields and people pay for it.

  Q1326  Chairman: I assume, although I am not an expect, that the Americans are not overgenerous in federal or state support?

  Mr Davenport: No.

  Q1327  Chairman: Sharon Goode?

  Ms Goode: "Dear Father Christmas ... " I would like to encourage the public funding organisations to re-visit their criteria, both in terms of not allowing people with degrees to get a second bite of the cherry because sometimes they have got the education but what they need is the level two and three craft skills. I would ask them to look at the job output criteria because in the freelance sector it is very hard to be able to promise 13 weeks or more work within 13 weeks of completing a course. They might have a day on a commercial, then a gap, then six weeks on a feature. It is up and down. I think that needs to be broadened. Particularly for independent training providers I would love to see a mechanism where people who are working with the hardest to reach who do not want to go to college can actually access HE funding to support those young people who want vocational skills and not academic skills.

  Q1328  Chairman: That point about people with degrees, they might have a degree—and I must be careful what I say—in media studies, for example, but that does not necessarily equip them with practical training although that might be the area they want to go in. What you are saying is that in addition (and it does not have to be media studies, it could be anything) there might be support available for the more practical skills that they are going to need? Is that the point?

  Ms Goode: The graduate internship idea of taking people and giving them a reality check in term of access points. It is the assistant skills or the business skills or whatever it is.

  Q1329  Chairman: Mr Ilott?

  Mr Ilott: I think that the service industries in general and the creative industries in particular, and within the creative industries especially film, are not really taken very seriously at public policy level. Can I quote from a recent paper from the economist Professor Alan Freeman where he says: "Economists tend to react strongly against the idea that the cultural and creative sector is analogous to an industry. They cling to industrial classifications they regard as tried and tested, organised around different types of material production. The cultural and creative sector is seen as a seven-day wonder soon to disappear along with `knowledge industries', `bioscience' and all other such transitory fancies." He goes on to say: "All basic elements of the economy are being re-shaped: its markets, its industrial structures and its property relations. I venture that the cultural and creative sector is a prototype of this reshaping, a paradigmatic industry which has refined and organised the use of creative labour on a new level, providing a model of organisation which a much wider range of service industries are now following." Alan Freeman's paper really addresses the neglect by the academic community of this sector. As I am sure you know, small and medium-sized enterprises constitute 90 per cent of our economy in terms of number of enterprises (not by employment but the majority by employment) and the problem we have with it not being taken sufficiently seriously is that we have suffered a bit from neglect and lack of support, which Michael and others have addressed, but also a lack of demand and a lack of rigour. I think we are allowed to get away with things because we are not properly supported. The latest evidence for that is Stephen Carter's report on Digital Britain, which makes enormous claims which I agree with about the significance of what is happening in digital media but where it comes to the training and skills part of that report it provides a very nugatory proposal for investment in providing necessary solutions. I would like to see that attitude change.

  Q1330  Chairman: That is very helpful. Thank you again very much for your evidence. I think we may need to follow up with you one or two of the points that you have made and perhaps we could do that by correspondence. Thank you very much for coming this morning and for giving your time to this inquiry. Mr Kuhn, do we see you next week?

  Mr Kuhn: No, I promise, never again.

  Chairman: You are very welcome any time you feel like coming. Thank you very much indeed.

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