Government axes org, but says it's committed to tax credits

While much of the European film industry slides into the dog days of summer, Blighty’s film biz was pushed into turmoil July 26 when its new coalition government announced the decision to ax the U.K. Film Council in a bid to cut costs and reduce the number and scope of government-funded agencies.

Though it’s no secret the new government plans to cut UKFC’s budget even further when the country’s spending review is announced in October (all government departments, including the Dept. for Culture, Media and Sport, were told by the Treasury to slash budgets by up to 40%), what astonished most industryites was the abruptness of the decision, made without consulting with Film Council chairman Tim Bevan and CEO John Woodward.

Bevan branded the decision a “big mistake, driven by short-term thinking and political expediency” while Woodward slammed it as “short-sighted and potentially very damaging.”

Industry reactions have been varied: one indie producer called the UKFC “an expensive failure with too little impact” while Blighty’s media and entertainment union BECTU called the decision “economically illiterate and culturally philistine.”

Since its inception in 2000, UKFC has been the public sector organization that distributes £26 million ($48.3 million) of lottery funding (this number is expected to increase to $51 million post 2012), promotes U.K. filmmakers, has overall responsibility for regional film agencies and seeks investment from overseas.

But while much of the industry is perplexed at the swift decision, the key concern is what the absence of the council will mean to international productions looking to shoot in Blighty.

One major unnamed U.S. production skedded to lense on the isle is already rumored to be looking elsewhere to shoot, and while government has professed an “absolute commitment” to the 20% tax credit, people are already starting to ask questions.

Producer Stephen Woolley (“The Crying Game”) suggests the decision was the government’s way of branding a new regime.

“It seems it’s not a question of necessity of funding,” says Woolley. “It’s an attempt to reduce bureaucracy across the board, and the UKFC has been lumped with everyone else. ”

More than 50 actors and actresses, including Emily Blunt and Bill Nighy, co-signed a letter to the Daily Telegraph opposing the council’s closure: “We owe any success we have had in our acting careers, to varying degrees, to films supported by the U.K. Film Council,” it said. And, arguing that the council helped make money for the Brit pic biz, added: “For every pound it invests, the country gets £5 back.”

Speaking to Variety, culture secretary Ed Vaizey said there was no cause for filmmakers to worry about bringing their pic to Blighty.

“We’ve got a lot of American studios very committed over here and we’ve got a huge amount of infrastructure,” he says. “Just because we’ve announced the abolishment of the Film Council doesn’t mean we’re abolishing the U.K. film industry. We have an absolute commitment to the tax credit. “

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