British film and high-end television 2

The Independent Film Tax Credit is a game-changer for domestic production and a welcome sign of continued Government commitment to the sector. But it is not a silver bullet for all the problems facing independent British film. Without further intervention, producers will still struggle to develop and raise finance for films, and the films that are made will not be seen by audiences. (Conclusion, Paragraph 14)

Development is the essence of R&D in the film sector. Funding it is essential for producers to develop valuable intellectual property, pay creative teams from the earliest stages of a project and maintain a consistent slate of films. This is vital for the Government’s growth agenda, as funding production companies’ slate development will enable them to grow resilient businesses. (Conclusion, Paragraph 18)

The Government should immediately amend the definition of R&D for tax relief purposes so that it captures creative activity by the film and HETV sectors, and wider creative industries. (Recommendation, Paragraph 19)

The Government should immediately review the impact of changes to the Enterprise Investment Scheme and Seed Enterprise Investment Scheme on the film sector to ensure producers can and do access the full range of finance for their films. It should report its findings to us within six months. (Recommendation, Paragraph 22)

In the Autumn 2025 Budget, the Government should introduce a 25% tax relief for the Prints & Advertising (P&A) costs of films claiming the Independent Film Tax Credit, to support the distribution and exhibition of British films. (Recommendation, Paragraph 27)

The UK Global Screen Fund delivers excellent value for money, but is insufficient in level and scope to provide the support that our independent film sector requires. (Conclusion, Paragraph 32) 100

The Government should increase the budget for the UK Global Screen Fund in line with the BFI’s Spending Review bid to provide certainty and maximise the potential return on investment. (Recommendation, Paragraph 33)

The UK has not adequately compensated for the loss of Creative Europe funding, of which it was a net beneficiary, and simply increasing UKGSF will not deliver all the benefits that membership of that network did. (Conclusion, Paragraph 34)

As part of the Review of the Implementation of UK-EU Trade and Co- operation Agreement in 2026 the Government should seek to rejoin Creative Europe as an associate member. (Recommendation, Paragraph 35) The crisis in domestic HETV

Culturally British domestic HETV is vital to the UK’s identity, national conversations and talent pipeline, but it is under threat. Without urgent intervention, history will repeat itself and the problems that have been seen in independent film will extend to our once vibrant domestic television sector. (Conclusion, Paragraph 47)

Domestic HETV needs to be supported through enhanced tax incentives just as independent film has been. To tackle the issues facing domestic production, any increase in HETV tax relief must not merely incentivise streamers to spend more but specifically benefit public service broadcasters and independent producers. This might be done by limiting the uplift to HETV productions at the lower end of the budget range; however, further work is needed to build the economic case for this intervention. (Conclusion, Paragraph 48)

We recommend the BFI urgently conducts analysis on the potential design and return on investment of a targeted uplift to HETV Audio-Visual Expenditure Credit for domestic productions with budgets of £1 million to £3 million per hour. The Government should commit to introducing the measure at the next fiscal event if the projected return on investment and impact on domestic production is found to be positive. (Recommendation, Paragraph 49)

The success of the UK’s HETV sector relies on continuing to attract inward investment while maintaining a vibrant domestic industry underpinned by strong intellectual property rights. Yet the dynamic between independent producers and subscription video-on-demand (SVoD) platforms is not sustainable, and successful production companies are being gutted by deals that deny them the ability to fully monetise their IP. While the 101 differences in business models mean it may not be appropriate to extend the existing terms of trade as they stand for PSBs to streamers, similar mechanisms must be considered. (Conclusion, Paragraph 55)

We recommend the Government immediately commissions research on how regulatory measures, akin to the PSB terms of trade, could be applied to SVoD platforms to ensure that independent production companies developing IP in the UK maintain a minimum level of ownership over those rights. (Recommendation, Paragraph 56)

In HETV, the balance between inward investment and domestic production is at a tipping point. It is time for streamers to put their money where their mouth is. They laud the UK’s mixed production ecology, with public service broadcasters and independent producers at its heart, but their business practices are putting that at risk. They need to step up their support for the making of culturally British content, and not just reap the cultural and training benefits it provides. Ultimately, they should then benefit from a healthier supply of PSB-made shows that they can license for their platforms. (Conclusion, Paragraph 61)

We recommend that all subscription video-on-demand (SVoD) platforms that operate in the UK pay a 5% levy on their UK subscriber revenue into a cultural fund administered by the BFI to support domestic HETV production. The industry should establish this fund on a voluntary basis; however, if it does not do so within 12 months, or if there is not full compliance, the Government should introduce a statutory levy. (Recommendation, Paragraph 62)

Advertising revenue is key to the HETV production ecosystem, and the market is changing as SVoD platforms grow their ad-supported subscription tiers. We intend to revisit the issue of advertising and its role in the TV ecosystem later in the Parliament. (Conclusion, Paragraph 64) Incentivising inward investment

The Government is right to commit to maintaining the competitiveness of the UK’s tax incentives, and changes must be balanced with stability. Yet the production sector is much more agile than Government, and the time it took to reform expenditure credits for VFX shows that policymaking and implementation needs to be quicker to keep the UK’s tax incentives globally competitive. (Conclusion, Paragraph 74)

Twice a year, the Government should benchmark the value and eligibility criteria of the UK’s film and HETV tax incentives against those of other countries. Where the UK’s offer is found to be less competitive, the Government should immediately review the financial case for changing the 102 UK’s incentives in the context of the full range of economic support for the industry, and bring forward any changes deemed beneficial to maintaining overall competitiveness. (Recommendation, Paragraph 75)

We are not convinced that Audio-Visual Expenditure Credits are the best vehicle to incentivise wider industry practices, if doing so undermines the fundamental aim of attracting investment. (Conclusion, Paragraph 76)

It is concerning that the Government does not know how much additional studio space the UK will need to support both inward investment and domestic production in the years ahead. Recent business rates revaluations also risked devastating inward investment in studios across England and Wales. That must not happen again. The 40% relief for film studios is welcome, but temporary. (Conclusion, Paragraph 80)

In delivering its promised reform of business rates, the Government should prioritise growth sectors such as film and HETV and ensure reforms support, rather than undermine, investment in them. (Recommendation, Paragraph 81)

The Government should require productions claiming AVEC to report a breakdown of their spending across the nations and regions of the UK. This would improve data on the national and regional distribution of production spend and support the case for any policy interventions such as potential uplifts to AVEC. (Recommendation, Paragraph 86)

To address the industry’s perceptions of organisational London-centric bias, the Government should split the roles of British Film Commission CEO and Film London CEO the next time that the existing contracts are negotiated or the roles advertised. (Recommendation, Paragraph 88)

The Government must be fully engaged with the EU’s discussions on ‘European works’ and mitigate any potential changes to the UK’s status under it. We ask the Government to write to us every six months with its latest assessment of the EU and its member states’ positions, relevant debates and policy developments, plus the action it is taking to protect the UK’s status. (Recommendation, Paragraph 92)

It is tempting to see 2023’s inward investment crisis as a blip, but while the UK remains so exposed to US investment global political and market forces will continue to affect our film and HETV industry. Our recommendations to support domestic production should help ride out future storms, but the Government and industry must not become complacent about the UK’s status as the ‘Hollywood of Europe’. (Conclusion, Paragraph 94) 103 Supporting the workforce

From our world-class actors, writers, composers and directors to our highly skilled VFX artists and dedicated, hair and make-up professionals, costume designers and technical crew members, the people that make, distribute and exhibit British films and HETV programmes are a key reason the industry is a global success story. (Conclusion, Paragraph 97)

The film and HETV industry has been too slow to respond to skills shortages. That has had serious consequences for those working in it, and for the ability of domestic productions to afford to pay crews and creatives. Countless reviews, reports, strategies and plans for tackling this crisis have been published or promised, but essential questions remain unanswered about the number of people that are needed, the roles that need filling, the costs of training those people and the adequacy of current spending on skills to meet those costs. There is an urgent need not just for strategic thinking, but for a clear path to delivering practical measures that tackles the crisis once and for all. (Conclusion, Paragraph 106)

We are not convinced ScreenSkills is up to the challenge of delivering meaningful action on skills and training. It has been slow to grasp the urgency of the situation, to identify its priorities and performance indicators and ultimately to tackle the root causes with confidence and authority. (Conclusion, Paragraph 107)

We recommend that the Government link any future public funding for ScreenSkills to specific, measurable outcomes based on it publishing and meeting ambitious and robust performance indicators. (Recommendation, Paragraph 108)

Given how important skills are to the film and HETV industry, we are surprised that major streamers and studios could not give us a straight answer on how much they spend on training. The companies either don’t know how much they are spending or have something to hide. Either way, we are not confident the industry has enough incentive to share the data that is needed to develop a coherent, sector-wide skills strategy. We also note that relying on voluntary contributions of 1% of production budgets delivers a fluctuating sum for skills training, which is an unreliable means of resourcing a vital need for the industry. (Conclusion, Paragraph 113)

We recommend that the Government introduces a statutory requirement for the entire film and HETV production industry to report their spending on skills and training as a percentage of their production budgets every financial year. (Recommendation, Paragraph 114) 104

We welcome the Government’s plans for a Growth and Skills Levy that meets the needs of the film and HETV sectors, and wider creative industries. The rollout of shorter apprenticeships is welcome, but the Government must now go further to ensure the industry maximises its use of levy funds and derives the fullest benefit from them. (Conclusion, Paragraph 119)

The Growth and Skills Levy must be fully compatible with work in the film and HETV sectors by: (Recommendation, Paragraph 120) • Ensuring portability of apprenticeships between employers; • Supporting smaller companies with the overhead costs of delivering apprenticeships; • Incentivising high-quality training providers and higher education institutions to provide apprenticeships, by reducing the bureaucratic obligations on them and by subsidising costs when cohorts are small; and • Funding high-quality continuous professional development.

Skills will be vital to the ability of the film and HETV sectors to contribute to the Government’s industrial strategy, but the Department for Culture, Media and Sport does not have enough of a stake in driving the skills agenda across Government. It is relying on the goodwill of the Department for Education to consider the creative industries when developing skills policy, and there is no guarantee that this will continue. We await the Government’s plans for the Growth and Skills Levy and industrial strategy and will revisit this issue if they do not address the skills needs across the creative industries. (Conclusion, Paragraph 121)

The range of roles required to make film and HETV means entire cohorts of sixth-form students could find jobs in the industry that fit their skills and interests, and building awareness of career opportunities is essential to attracting new talent into the industry. However, there remains a clear need to convince educators, parents and young people from all communities that film and HETV offers a viable career path. (Conclusion, Paragraph 126)

The Government and BFI should launch a national awareness campaign highlighting the employment opportunities offered by film and HETV, and the range of skills the industry requires. (Recommendation, Paragraph 127)

The British film and HETV industry benefits hugely from the flexibility afforded by a predominantly freelance workforce, but in return both it and the Government need to do more to support freelancers when they are out of work. (Conclusion, Paragraph 135) 105

In its forthcoming industrial strategy, the Government should set out specific measures to address pay precarity among freelancers working across the creative industries, such as a guaranteed basic income or minimum hourly wage. (Recommendation, Paragraph 136)

The film and HETV industry will continue to lose workers if it does not address systemic issues with working conditions, and the Government should hold it accountable for doing so. The prioritisation of the predominantly freelance creative industries in the industrial strategy, and the Government’s wider commitment to employment rights, makes the case for giving freelancers a dedicated voice within policymaking stronger than ever. (Conclusion, Paragraph 141)

We repeat our predecessor Committee’s call for the Government to appoint a Freelancers’ Commissioner, with appropriate powers and cross- departmental oversight. The Freelancers’ Commissioner should work with the film and HETV industry to develop a framework for addressing pay precarity, hours, working conditions and behaviours that is published within 12 months of their appointment. (Recommendation, Paragraph 142)

It is in the film and HETV industry’s interests to tackle bullying and harassment through effective self-regulation. Yet for the Creative Industries Independent Standards Authority (CIISA) to operate effectively, the industry must see supporting it financially and ideologically to be a fundamental part of operating in the UK. That has not yet happened. The Government must send a strong message that it is prepared to use all means at its disposal to compel the creative industries, including the film and HETV sectors specifically, to support CIISA. (Conclusion, Paragraph 148)

All parts of the creative industries under CIISA’s remit should commit to unconditional, long-term funding within six months. In the meantime, the Government should explore all options for funding CIISA in case the industry does not deliver a voluntary solution. If linking eligibility for Audio-Visual Expenditure Credits with support for CIISA is too complex and will potentially deter inward investment, industries under CIISA’s remit could be subject to a levy to fund its work. (Recommendation, Paragraph 149)

The industry’s attempts to become more inclusive and representative of communities across the UK have made some progress in terms of the stories that are being told and the people working in front of and behind the camera. But the film and HETV sectors remain highly under-representative, and more must be done. (Conclusion, Paragraph 153) 106

We recommend that the BFI significantly increase the number of funded short film schemes in the nations and regions. This could be rapidly delivered though BFI Skills Clusters by targeting funding to schemes giving the next generation of filmmakers the chance to develop their skills and professional reputations. (Recommendation, Paragraph 154) Cinema exhibition

The problem facing cinemas is not that too few films are being released; it is that there is not enough variety and quality in the films that are reaching cinemas to tempt cinemagoers through the doors. The solution is therefore not simply more films, but better films with improved marketing. That should in part be addressed by Government through our recommendation for a distribution tax relief (paragraph 27), which will help to grow domestic demand for British films and enable cinemas to benefit from the Independent Film Tax Credit. (Conclusion, Paragraph 166)

It is understandable that the exhibition sector seeks a VAT reduction when it faces so many challenges around costs, box office revenue and infrastructure. However, those calls must be considered alongside the regular requests we hear for reduced rates of VAT from across the creative industries, and the Government’s broader economic and policy position. The Government has ignored previous calls to assess the impact of VAT cuts on live music, but now the creative industries are a key pillar of its industrial strategy, it should think again. (Conclusion, Paragraph 173)

We recommend that the Government reviews the impact of a permanent cut to VAT on entry to cultural events, including cinema tickets, to identify whether it would support the growth of the creative industries. (Recommendation, Paragraph 174)

Independent cinemas need and deserve organisational and capital funding to continue to perform their vital cultural roles in the heart of communities. Without it, there is a risk that the Culture Recovery Fund’s investment in independent cinemas will have been for nothing. However, supporting this part of the sector should not divert money from commercial cinemas, which serve a cultural function of their own and are also under significant pressures. (Conclusion, Paragraph 177)

The Government should fund the BFI’s proposals to deliver core funding, similar to Arts Council England’s National Portfolio Organisation model, for independent cinemas. This should include a capital funding pot to upgrade cinemas’ infrastructure and improve their energy efficiency. (Recommendation, Paragraph 178) 107 Impact of Artificial Intelligence

Industry guidelines based around protecting human creativity in the use of generative AI are welcome, but the film and TV sectors are calling out for help to embrace the growth potential of generative AI in a way that is fair, responsible and legally compliant. (Conclusion, Paragraph 185)

At the Spending Review, the Government should fund the BFI’s development of an AI observatory and tech demonstrator hub to enable it to provide effective leadership around the industry’s use of AI. (Recommendation, Paragraph 186)

The Government’s AI Sector Champion for the creative industries, once appointed, should work with the industry to develop an AI certification scheme for the ethical use of generative AI in film and HETV. In setting out guidelines for the responsible use of generative AI, the scheme should consider the interests of copyright holders, creatives and audiences. To ensure compliance and protect the industry from irresponsible use of AI tools, the Government should mandate certification for UK-based broadcasters or productions claiming tax incentives and National Lottery funding. (Recommendation, Paragraph 187)

Getting the balance between AI development and copyright wrong will undermine the growth of our film and HETV sectors, and wider creative industries. Proceeding with an ‘opt-out’ regime stands to damage the UK’s reputation among inward investors for our previously gold-standard copyright and IP framework. (Conclusion, Paragraph 193)

The Government should abandon its preference for a data mining exception for AI training with rights reservation model, and instead require AI developers to license any copyrighted works before using them to train their AI models. (Recommendation, Paragraph 194)

Our world-class creatives are the lifeblood of the UK’s film and HETV sectors. However, the rapid growth of generative AI technologies threatens their earnings and future employment opportunities. This is not just an issue for one part of the industry: it about real lives and livelihoods, and the impact will be felt by the most vulnerable. (Conclusion, Paragraph 197)

Although the film and HETV industry may be motivated to protect performers’ interests, with the history of collective bargaining agreements equipping it do so, that situation is not common across all the creative industries. The UK’s patchwork of copyright, intellectual property and data protection legislation is failing to protect performers from the nefarious use of generative AI technologies, such as unauthorised voice cloning and deepfakes. (Conclusion, Paragraph 206) 108

The Government should legislate to prevent historical contract waivers from being interpreted to allow the use of recorded performances by AI tools. (Recommendation, Paragraph 207)

Within the next six months the Government should also conduct a review of the Copyright, Designs and Patents Act 1988 and the UK’s GDPR framework to consider whether further legislation is needed to prevent unlicensed use of data for AI purposes. (Recommendation, Paragraph 208)

We repeat our predecessor Committee’s calls for the Government to implement the Beijing Treaty within the next six months, including extending unwaivable moral rights to audiovisual performances. (Recommendation, Paragraph 209) The work of the BFI

Too often the BFI’s responsibilities have been expanded by the Government without a commensurate, long-term increase in the grant-in-aid support available to it. That has put the UK’s reputation with inward investors at risk and could undermine the growth of the vital sectors under its remit. (Conclusion, Paragraph 216)

At each Spending Review, the Government should ensure any recent or upcoming changes to the screen sector’s tax incentives, including but not limited to the addition of new forms of expenditure credit, are reflected in a commensurate increase in the grant-in-aid settlement for the BFI’s Certification Unit. (Recommendation, Paragraph 217)

The amount of National Lottery funding available to the BFI must reflect its role and remit, which has changed considerably since the allocations were last set. Determining where an increase for the BFI might come from, however, requires a thorough review across the different sectors and distributing bodies. Such a review is long overdue, and should not be delayed by the protracted uncertainty around the level of returns for good causes under Allwyn. (Conclusion, Paragraph 222)

We recommend the Government conducts a review of how National Lottery returns for good causes are allocated between distributing bodies by the end of the 2025-26 financial year. (Recommendation, Paragraph 223)

To safeguard our national collection of film and TV, and increase public access to it, the Government should introduce and resource a statutory deposit scheme for the moving image. Given the complexity and resource implications of this, the Government should first conduct research into a statutory deposit scheme for the moving image to be published within 12 months. This research should determine the potential scope of such 109 a scheme, the changes that would have to be made to the BFI National Archive, including expansion of its conservation centre, and the initial and ongoing costs of the scheme for publishers and the BFI. (Recommendation, Paragraph 232)

The Government should introduce targeted copyright exemptions that allow for greater access to archive material without harming copyright holders. Those include adjusting legislation concerning ‘dedicated terminals’, broadening the definition of ‘educational establishments’, amending the ‘2039’ rule, and introducing exemptions for orphan works and commercially unavailable works. (Recommendation, Paragraph 234)

The Government, in collaboration with the screen heritage sector and education providers, should develop a degree-level apprenticeship standard for film preservation and presentation within the next 24 months. To enable education institutions to deliver apprenticeships with small student cohorts, the Growth and Skills Levy should provide dedicated funding to make it economical for them. (Recommendation, Paragraph 237)

Within the next 12 months, the Government should work with the BFI and wider screen heritage sector to create a National Screen Heritage Strategy, including in the areas of funding, skills and infrastructure. The strategy should be reviewed and renewed periodically, to maintain focus on the needs and resilience of screen archives, rather than being allowed to expire and once again leave screen archives at risk. (Recommendation, Paragraph 241) 110