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U.K. mulls film fund plans

British weigh alternatives for financing industry

Three months after Blighty’s new coalition government moved to shutter the U.K. Film Council without anything to take its place, the government has begun to weigh new proposals to deal with industry concerns.

With UKFC due to close in 2012, culture minister Ed Vaizey and culture secretary Jeremy Hunt are reported to have sought proposals from Film4, BBC Films, Film London and the British Film Institute.

Insiders say dialogue between the government and the biz has moved quickly from consultation to ideas, and the new blueprint for handing out Lottery money for film projects is expected to be announced in November.

One suggestion is that the film fund, currently fed by contributions from the National Lottery, be administered by the British Film Institute but paid out by the Arts Council. BFI is a national body constituted under a Royal Charter, which means no politician can actually close it.

Under this model, the UKFC’s additional arms would operate under the Film London umbrella. This includes educational body Skillset and the British Film Commission, which assists the U.S. majors when they shoot in Blighty.

Certification — the process that monitors whether a pic qualifies for the Brit tax credit — could operate under Film London as well.

“X-Men: First Class” helmer Matthew Vaughn was quick to throw his own idea on the table at the end of August, suggesting that the majors recoup the Brit tax credit of 16% after they have recovered their own outlay and then received a profit share.

The producer-director suggested a similar arrangement could be applied to indie films. With these returns, the government could form a matching fund that indie producers could tap into in order to see their business grow and strengthen the entire creative sector.

This plan, of course, forces the Brit biz to lean heavily on the studios.

“The idea that the government is going to back a scheme that relies on studios is not very likely,” said Andy Paterson, who produced 2003’s “Girl With a Pearl Earring.”

Some question the validity of Vaughn’s proposal and suggest it was put out there to test U.S. majors’ reactions to the possibility of change in the tax credit system.

James Lee, former chairman of Scottish Screen, suggested the Lottery funds and money from BBC Films and Film4 be lumped into a national distribution company, while Pinewood-Shepperton topper Michael Grade suggested that control go to a handful of producers who would oversee the fund distribution.

Pact, the trade org that reps producers, proposed that instead of Lottery money being recouped and thus going back into an org such as UKFC to pay for its overhead, 30% of funds go to pay off the producer’s overhead while 70% be placed in an escrow account that goes into the producer’s next pic.

“This means the Lottery money won’t disappear out of the system,” said Pact head John McVay. “At this point, producers become an equity investor along with every other investor and it empowers the production company at the same time.

“We’re trying to change the behavior of the public sectors and the film community at large to allow them to become more entrepreneurial. It means that over time, we’ll have capitalized indie producers like in Germany and France, and it moves them away from being obsessed with public subsidy.”

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