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Facts in focus • A total of 189 UK ďŹ lms (152 in 2009) received ďŹ nal certiďŹ cation as British ďŹ lms in 2010. Of these, 170 were Schedule 1 ďŹ lms and 19 were co-productions. • The total production budget of ďŹ nally certiďŹ ed Schedule 1 ďŹ lms was ÂŁ1,002 million in 2010 (ÂŁ604 million in 2009). • There were 146 interim Schedule 1 approvals in 2010, with a total anticipated production budget of ÂŁ966 million. • The median co-production budget rose over the last decade, while since 2005 that of Schedule 1 ďŹ lms dropped from ÂŁ3.5 million to just ÂŁ0.4 million.
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16.1 Qualifying as an official British film
3
The Secretary of State for Culture, Olympics, Media and Sport (DCMS) is responsible for issuing British Film Certificates on the basis of recommendations made by the Certification Unit. In 2010 this Unit was part of the UK Film Council, but became part of the British Film Institute (BFI) in April 2011 when the BFI assumed responsibility for the majority of the UK Film Council’s core functions. Makers of certified British films can apply for tax relief on qualifying films or apply for Lottery funding from the BFI and other sources. (There is more information about public investment in film in Chapter 18.) Schedule 1 films are films certified as British under Schedule 1 of the Films Act 1985. To qualify, films starting principal photography on or after 1 January 2007 must pass a UK Cultural Test. Points are awarded for UK elements in the story, setting and characters and for where and by whom the film was made (see the links at the end of the chapter for details of the Cultural Test). A wide variety of films qualified as British under the Cultural Test in 2010, from Harry Potter and the Deathly Hallows: Part 1 and Sherlock Holmes to Made in Dagenham and Sex & Drugs & Rock & Roll. Films can also qualify as British if they are certified under the various official UK co-production agreements. Official co-productions must be certified by the competent authorities in each country as meeting the certifying criteria, which include the creative, artistic, technical and financial input from each co-producer. Once certified, a film counts as a national film in each of the territories and may qualify for public support on the same basis as national films in that territory. On the basis of recommendations made by the Certification Unit, the Secretary of State grants ‘interim approval’ prior to the start of principal photography to those films that meet the criteria and ‘final certification’ once the film has been completed and final documents submitted. British films made as official co-productions are not required to pass the Cultural Test.
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16.2 Schedule 1 cultural test certifications, 2009 and 2010
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In 2010, a total of 170 films (144 in 2009) were finally certified as British under the Schedule 1 Cultural Test (Table 16.1). The total budget of finally certified films increased from £604 million to £1,002 million. This reflects the higher number of big budget inward investment films made in 2009 feeding through to a higher value of final certifications in 2010. The number of interim Schedule 1 approvals was almost identical in 2010 to 2009 (148 in 2009 and 146 in 2010), but the aggregate budget fell from £1,585 million in 2009 to £966 million in 2010. The decrease in aggregate budget is due to a higher number of low budget films and fewer high value inward investment productions receiving interim certification in 2010.
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Table 16.1 Schedule 1 cultural test certifications, 2009 and 2010 2009
Interim approval Final certification
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At the end of 2010, the UK had seven active bilateral treaties in place, with Australia, Canada, France, India, Jamaica, New Zealand and South Africa. At that time the UK had also signed treaties with Israel, Morocco and Palestine which were subject to constitutional procedures and ratification before they could come into force. Official UK co-productions can also be certified under the European Convention on Cinematographic Co-production of which the UK is one of 42 signatories.
Type of certification
4
2010
Number
Budget (£ million)
Number
Budget (£ million)
17
148 144
1,584.6 603.9
146 170
965.7 1,001.7
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Source: DCMS, UK Film Council. 19
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Image: Weekender courtesy of Momentum Pictures, an Alliance Films Company
Chapter 16: Films certified as British 1998–2010 – 137
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16.3 Co-production certifications, 2009 and 2010 In 2010, the number of official co-productions increased from the low levels of 2008 and 2009 with 19 final certifications (£137 million) and 24 interim approvals (£189 million). The 2010 numbers remain low, however, when compared with the much higher levels of the early 2000s. The decline in numbers since then has been influenced by the closing of tax loopholes and the redesign of the post-2006 tax relief to relate to UK spend rather than the total film budget. Table 16.2 Co-production certifications, 2009 and 2010 2009 Type of certification
2010
Number
Budget (£ million)
Number
Budget (£ million)
18 8
94.8 48.0
24 19
189.2 137.4
Interim approval Final certification Source: DCMS, UK Film Council.
In 2010, 14 of the 19 final co-production certifications were under the European Convention on Cinematic Co-production, two were under the UK-Australia agreement, two were under the UK-Canada agreement and one was under the UK-New Zealand agreement. Of the 24 interim co-production certifications, 15 were under the European Convention, four were under the UKSouth Africa agreement, two were under the UK-Canada agreement, two were under the UK-New Zealand agreement and one was under the UK-Australia agreement.
16.4 Finally certified British films, 1998–2010 The number of UK films (Schedule 1 and co-productions) receiving final certification rose gradually from 56 in 1998 to 172 in 2005 and has fluctuated since then (Figure 16.1). The numbers fell to 105 in 2008 before picking up again to 152 in 2009 and to a peak of 189 in 2010. In the mid-2000s the majority of final certifications were co-productions, but these dropped away to the very low levels of 2008 and 2009, before increasing slightly in 2010.
Figure 16.1 Number of finally certified (Schedule 1 and co-production) UK films, calendar years 1998–2010 Number of final certifications 200
150
100
50
0
98
99
00
01
02
03
04
Schedule 1
40
68
108
75
77
76
Co-production
16
13
22
41
56
84
Total
56
81
130
116
133
160
Source: DCMS, UK Film Council.
138 – BFI Statistical Yearbook 2011
05
06
07
08
09
10
72
66
74
98
97
144
170
99
106
68
56
8
8
19
171
172
142
154
105
152
189
1
2
The total production budget of finally certified British films peaked at £1,822 million in 2004 (Figure 16.2). The rise was mainly due to the surge in official UK co-productions in the early 2000s. In 2004/05 a series of cooling measures designed to restore balance in co-production relations were introduced by the DCMS and Her Majesty’s Revenue and Customs (HMRC) and in 2007 the basis of tax relief was shifted from total budget to UK spend, reducing the incentive to structure films as co-productions as these films generally have lower levels of UK spend than Schedule 1 films. The value of official co-productions in 2008 and 2009 fell back to the pre-2000s level, but increased slightly in 2010. Figure 16.2 Total production budget of finally certified (Schedule 1 and co-production) UK films, calendar years 1998–2010
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4
5
6
Total production budget (£ million) 2,000 7 1,500 8 1,000 9 500 10 0
Schedule 1 Co-production Total
98
99
00
01
02
03
232.1
407.8
361.2
538.5
585.4
59.5
66.3
95.5
277.7
462.2
291.6
474.1
456.7
816.1
1,047.5
04
05
06
07
08
09
10
330.0
643.5
757.7
402.0
561.4
935.4
603.9
1,001.7
427.6
1,178.2
877.1
459.5
356.7
45.2
48.0
137.4
757.6
1,821.7
1,634.8
861.6
918.1
980.6
651.8
1,139.1
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Source: DCMS, UK Film Council. Notes: Total production budget is total budget for Schedule 1 films and total investment for co-productions. Figures may not sum to totals due to rounding.
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Figure 16.3 shows the levels of UK spend over the same period. UK spend is generally that part of the production budget spent in the UK (see notes to Figure 16.3). At its peak in 2005, UK spend reached £1,023 million whereas in 2009 it had dropped to £445 million before increasing to £905 million in 2010. Although over half the total production budget was contributed by co-productions at the peak in 2004–2005, the UK spend of co-productions was less than that of the Schedule 1 films. Since then, their contribution has continued to fall. In 2010, Schedule 1 films accounted for 94% of the UK spend of finally certified films.
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Chapter 16: Films certified as British 1998–2010 – 139
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Figure 16.3 UK spend of finally certified (Schedule 1 and co-production) UK films, calendar years 1998–2010 UK spend (£ million) 1,200 1,000 800 600 400 200 0
Schedule 1 Co-production Total
98
99
00
01
02
03
04
05
06
07
08
09
10
151.4
269.3
292.4
459.3
522.5
293.3
560.2
685.4
341.1
442.4
588.5
422.9
853.8
22.9
21.6
37.8
88.2
132.2
127.3
442.7
337.4
183.1
123.1
34.0
21.6
51.3
174.4
290.9
330.3
547.5
654.7
420.6
1,002.9
1,022.8
524.2
565.5
622.5
444.6
905.1
Source: DCMS, UK Film Council. Notes: ‘UK spend’ is the ‘value of the production activities in the UK’ for Schedule 1 films and ‘UK expenditure’ for co-productions (bilateral and European Convention). UK spend for co-productions may include some expenditure on UK goods and services which took place outside the UK. Figures may not sum to totals due to rounding.
UK spend as a percentage of total budget is typically lower for co-productions than for Schedule 1 films (Table 16.3). The co-production UK spend share is usually around one-third, though it did rise in 2008 and 2009 as the number of co-productions fell away. The UK spend share was as high as 75% in 2008 and 45% in 2009, but in 2010 fell to the more ‘typical’ level of 37%. The UK spend share of Schedule 1 films has averaged between 63% and 91% and in 2010 was 85%. Tax relief for British films is based on UK spend up to a maximum of 80% of the qualifying budget. Table 16.3 UK spend as % of total production budget, 1998–2010 Schedule 1 Co-production Total
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
65.2 38.5 59.8
66.0 32.5 61.3
81.0 39.6 72.3
85.3 31.8 67.1
89.3 28.6 62.5
88.9 29.8 55.5
87.1 37.6 55.1
90.5 38.5 62.6
84.8 39.8 60.8
78.8 34.5 61.6
62.9 75.2 63.5
70.0 45.0 68.2
85.2 37.3 79.5
Source: UK Film Council.
16.5 Median budgets, 1998–2010 Median budgets for final certifications are shown in Figure 16.4. From 1998 to 2005 the median budget for co-productions was on a rising trend, increasing to £4.9 million. This was followed by a drop in 2006–2008 to £3.8 million then a steep rise in 2009 to £6.3 million followed by a drop in 2010 to £4.4 million. However, the fluctuations in median budgets in recent years is likely to be at least partly due to the very low numbers of films certified in 2008 and 2009, as with low numbers the median is more susceptible to the effect of individual titles. A decade ago, the median budget of Schedule 1 films was £3 million. This dipped in 2002–2003 to around £2 million, but then rose to over £3 million in 2004 and 2005. Since then, as the number of Schedule 1 films has increased, the median budget has fallen steeply to £1 million in 2008 and 2009 and to only £0.4 million in 2010.
140 – BFI Statistical Yearbook 2011
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2
Figure 16.4 Median budgets of final certifications, 1998–2010
3
Median budget (£ million) 7.0 4
6.0 5.0
5
4.0 3.0
6
2.0 1.0 1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Schedule 1
3.1
2.8
2.8
2.9
2.0
1.8
3.2
3.5
2.0
1.2
1.0
1.0
0.4
Co-production
2.5
3.5
3.3
3.4
4.7
3.6
4.3
4.9
4.4
4.4
3.8
6.3
4.4
0
7
8
Source: UK Film Council. Note: The median is the middle value, ie there are equal numbers of films above and below the median.
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16.6 Final certifications by budget band, 1998–2010 Table 16.4 shows that the reason for the decline in the Schedule 1 median budget is the growth in the number of very low budget (under £2 million) films being certified. This growth has been particularly marked since 2006, suggesting that UK tax relief has become more accessible to low budget filmmakers, following the introduction of the new rules in 2007. The total number of medium and high budget Schedule 1 films has remained fairly consistent from year-to-year over the last decade. Table 16.4 Final Schedule 1 certifications by budget band, 1998–2010 Budget band £ million
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12
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2 2 5 20 11 40
3 3 12 26 24 68
1 3 14 43 47 108
3 10 7 24 31 75
2 13 10 13 39 77
2 3 5 25 41 76
5 7 13 23 24 72
5 9 7 25 20 66
2 7 9 21 35 74
3 7 9 18 61 98
9 6 11 9 62 97
4 7 8 24 101 144
6 9 10 16 129 170
>30 10–30 5–10 2–5 =<2 Total
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13
14
15
Source: DCMS, UK Film Council.
Table 16.5 shows the distribution of Schedule 1 budgets by budget band for the years 2007–2010. The 4% of films with budgets over £30 million accounted for 62% of the aggregate budget, while the 69% of films with budgets under £2 million accounted for only 7% of the aggregate budget. This reflects both the growth in the number of low budget Schedule 1 films and the big budget inward investment UK/USA titles in the top budget band.
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Chapter 16: Films certified as British 1998–2010 – 141
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Table 16.5 Final Schedule 1 certifications, budget distribution by budget band, 2007–2010 Budget band £ million
Number
Total budget £ million
% number
% budget
22 29 38 67 353 509
1,932.3 493.0 264.0 209.8 203.2 3,102.4
4.3 5.7 7.5 13.2 69.4 100.0
62.3 15.9 8.5 6.8 6.6 100.0
>30 10–30 5–10 2–5 =<2 Total Source: DCMS, UK Film Council. Note: Figures may not sum to totals due to rounding.
For co-productions the pattern is different. The rise and fall in co-production numbers is clear from Table 16.6, which also shows a disproportionate increase in large budget co-production certifications in 2004–2005. This reflects the structuring of some large budget UK/USA inward investment films as co-productions at that time, a practice that has fallen away since the tax rules changed. Table 16.6 Final co-production certifications by budget band, 1998–2010 Budget band £ million
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
– – 5 6 5 16
– 2 2 6 3 13
– 2 4 13 3 22
1 7 8 19 6 41
1 14 12 21 8 56
– 11 18 39 16 84
8 20 14 40 17 99
4 15 32 39 16 106
2 5 20 28 13 68
2 7 13 25 9 56
– 2 1 4 1 8
– 1 4 1 2 8
– 3 5 7 4 19
>30 10–30 5–10 2–5 =<2 Total Source: DCMS, UK Film Council.
The budget distribution for co-productions was much more even than for Schedule 1 films, with 80% of films having budgets between £2 million and £30 million and accounting for 85% of the total budget, as shown in Table 16.7.
142 – BFI Statistical Yearbook 2011
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2
Table 16.7 Final co-production certifications, budget distribution by budget band, 2007–2010 Budget band £ million
>30 10–30 5–10 2–5 =<2 Total
3
Number
Total budget £ million
% number
% budget
2 13 23 37 16 91
67.6 197.9 170.6 128.0 23.2 587.3
2.2 14.3 25.3 40.7 17.6 100.0
11.5 33.7 29.1 21.8 3.9 100.0
Source: DCMS, UK Film Council. Note: Figures may not sum to totals due to rounding.
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7
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9
10
11
12
13
14
15
16
17
„
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3 For UK film production, see Chapter 17 (page 144) 3 For UK film economy, see Chapter 21 (page 185) 3 For public investment in film in the UK see Chapter 18 (page 157) 3 For more information about British films, tax relief and the Cultural Test, see http://www.bfi.org.uk/about/ qualifying/ 3 For more information on the European Convention on Cinematographic Co-production, see the Council of Europe website: http://conventions.coe.int (number 147 under the full list of treaties)
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Chapter 16: Films certified as British 1998–2010 – 143
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