As the press release makes clear, these numbers paint a mixed picture: ‘while UK box office receipts reached a record high, film production spend in the UK was down compared with the previous year’.
The box office gross total of £949.5 million for the UK and Republic of Ireland, up 5% on 2007, is the highest since records began in 1989. British films, which include big-budget inward investment features with US studio involvement (like The Dark Knight), shared 31% of cinema takings, the second highest such total in the last ten years (in 2005 it reached 33%).
On the production front, the UK was involved in the making of 111 feature films with production budgets of £500,000 and above in the calendar year 2008, compared with 126 similar productions in 2007.
The amount spent in the UK on these films totalled £578.2 million in 2008, down 23% on the 2007 total of £753.3 million.
(See UK Film Council news release for an explanation of these categories)
But as Table 1 shows, the fall was not uniform across the different types of production tracked by the UK Film Council. Spend on indigenous productions (those made by a UK production company and shot wholly or partly in the UK) rose 22% to £192.2 million in 2008, despite the fact there were two fewer of these films made than in the previous year. UK indigenous films included The Boat that Rocked, Green Zone, Dorian Gray, Me and Orson Welles and 1939.
This is quite an achievement for the indigenous industry, but the UK Film Council offers a bleak outlook for independent British films in 2009. Conditions are expected to be ‘tough with the economic downturn starting to take effect.’
The fall in inward investment feature production was due to exceptional factors, notes the UK Film Council, ‘including films being lost or postponed due to the US writers' strike, the exchange rate ($1.97-£1 in June 2008 compared to $1.53-£1 in November 2008), US productions being encouraged to spend closer to home because of US tax incentives, and the effects of the actors' dispute’.
But on the bright side, 2009 could be a better year for inward investment, ‘due largely to an upturn in the exchange rate which is further enhancing the UK's competitiveness and encouraging the US studios to bring more work to the UK’.
There was another sharp decline in co-production activity in 2008, and the UK Film Council does not expect the situation to improve in 2009, ‘given that the tax break incentivises spend inside the UK and therefore not production outside the UK’. In a related vein, Audrey Ward, writing last week in ScreenDaily, reported the findings of a study by Oxford Economics (OE) warning about the impact of the tax credit on co-production and offshore production activity.
According to Ward, the report recommends extending the tax credit to overseas activity linked to UK production. ‘Equivalent systems in Europe and further afield allow nationals to film outside the country.’ One source is quoted as saying,
The Department for Culture, Media and Sport (DCMS) is currently considering the OE report, and recommendations to ministers are expected in the next few months.