In the Observer business section today:
Jeremy Hunt: I've cut the UK Film Council so that money goes to the industry
The culture secretary says that financial support for UK film-makers will continue and that he has axed an expensive quango
My first decision as culture secretary was to abolish ministerial cars, saving £250,000 a year. I wanted to send a signal that the money we spend on culture should go to culture, not ministerial pay or privileges.
It is in that context that last week I announced the abolition of the UK Film Council and the Museums, Libraries and Archives Council. My department is responsible for an extraordinary 55 quangos, the vast majority with highly paid bosses and costly bureaucracy. But if we are going to face budget cuts I have a duty to ensure that taxpayers' money is spent where it gets the most bang for its buck. It is simply not acceptable in these times to fund an organisation like the UK Film Council, where no fewer than eight of the top executives are paid more than £100,000.
Stopping money being spent on a film quango is not the same as stopping money being spent on film. In fact my second decision actually increased the amount of money going into film when I restored the lottery to its original four pillars, increasing the share going to arts (including film) to 20%. This is expected to increase lottery funding for film by around £3m a year.
Britain is the world's third-biggest film market, with box office receipts of nearly £1bn last year. We make Hollywood blockbusters – including the two biggest franchises of all, Harry Potter and Bond – as well as creative successes such as Danny Boyle's Slumdog Millionaire. Less high profile but equally significant is the incredible skills base we have in our world-class facilities sector which includes visual effects and special effects.
But if the industry is to expand further, we also need to be honest about its failings. Two areas in particular need close attention.
The first is the chronic difficulties associated with film financing. Lew Grade said of Raise the Titanic that it would have been cheaper to lower the Atlantic. The challenges have not gone away. All too often when British film-makers want to make anything of scale, they end up selling all the intellectual property rights in advance simply to finance production. The result is that when we have a hit, the profits do not go back to the film-maker where they could be used to finance the next production. This is what happened with Slumdog Millionaire, a creative success for Film4 but a financial success for Fox Searchlight.
We welcome all foreign investment, which is why the film tax credit is staying. Worth at least £100m a year this is no small commitment. But a healthy film industry will also have a strong homegrown element. Our independent television production sector has understood the importance of IP retention and has become the largest exporter of TV formats in the world.
The second area we need to be honest about is where taxpayers and lottery money is best spent. That is why we want an open debate about, for example, how we fund films of high artistic worth that are unlikely to make it to general release. How do we ensure the public get to see the films they are paying for?
The other decision I have made is to guarantee the future of the British Film Institute. The role it plays in supporting our cultural heritage and promoting the cultural value of film is crucial. But we want to see them do this more effectively, so are looking to remove some of the red tape around what they do and give them greater operational and artistic freedom.
Support for film through the lottery and tax credits will continue. But it must be right to address the structural challenges it faces and focus resources on supporting frontline film-makers rather than expensive bureaucracy. We should not accept the relative size of the British film industry as a fait accompli. Rather, we must step up our ambitions and make the UK the best country for nurturing and promoting its homegrown creative talent.