CHAPTER 6: Summary of recommendations
335. We recommend that, given current financial
circumstances and the value to the international film industry
of a stable tax regime, the Government should keep the rate of
the tax credit for big budget films at its current level. At the
same time, we recommend that the rate of the tax credit be kept
under review by the Government, in consultation with the industry,
in order to ensure that the UK does not become uncompetitive as
a venue for international filmmaking. (para 73)
336. Given the problems faced by independent
film makers in raising finance for their projects, particularly
in the current recession, we recommend that the Government should
consider raising the net rate of film tax relief for productions
under £5m to 30 per cent. (para 78)
337. We acknowledge that there would be a benefit
to producers from a change to the "used or consumed"
provisions, to extend the tax credit to production expenditure
overseas, and the low cost of this change. We recommend that the
salaries of personnel employed on a film should be considered
eligible costs whether they are working in the UK or on location
overseas so long as the personnel are paid and taxed in the UK.
(para 83)
338. We recognise the claims of the videogames
industry for support in the face of foreign government-subsidised
competition, and recommend that the Government consider providing
tax incentives for videogames production. (para 88)
339. Given the difficulties of financing independent
British films, particularly following the withdrawal of banks
from film financing, we recommend that the Government should look
at ways of facilitating greater British private investment in
film production. This would need to be done in a way that ensured
that the private investment was genuine and not simply a means
of tax avoidance. (para 93)
340. We question, however, whether an industry
body like the UK Film Council should be substantially financed
by the Lottery rather than direct Government support. We regret
the reduction in funding made because of the demands of the 2012
Olympic Games. We recommend that the funding level should be restored
immediately after 2012/13. (para 103)
341. We do not consider that the small saving,
which a merger of the UK Film Council and the BFI would be likely
to achieve, would by itself justify an amalgamation. (para 107)
342. If, however, the proposal for the merger
of the UK Film Council and the BFI goes ahead, it will be important
that any organisational changes neither prejudice nor deter private
donations to the BFI's educational and archival work. (para 108)
343. We welcome the UK Film Council's emphasis
in its consultation document on supporting British films and filmmakers
as its first core activity, and its proposal to use funds recouped
from its investment in film to top up the Film Production Fund's
budget. (para 110)
344. We support the UK Film Council's continuing
commitment, as part of its first core activity, to the promotion
of the UK as an inward investment destination for film production.
In this context, we strongly support the proposal to strengthen
the Office of the British Film Commissioner. (para 111)
345. We welcome the provisions in the Digital
Economy Bill, which would bring film production within the public
service remit of Channel 4. We encourage the BBC to give greater
recognition to the role that BBC Films can play in developing
new projects and new talent in the British independent film sector.
(para 117)
346. We urge the Government, the UK Film Council
and the organisations representing the exhibition sector to find
a way of completing the digital equipping of cinemas in the UK
which, as necessary, provides help to smaller independent cinemas
to purchase or lease digital equipment. (para 123)
347. Irrespective of the outcome of the test
case on camcording of films in cinemas, we remain concerned that
the law is unclear and provides insufficient deterrent to abuse.
We recommend that the Government reconsider the case for specific
legislation to make it a criminal offence to record a film in
a cinema by camcorder. (para 129)
348. Given the strength of film industry concern
about the threat from audiovisual piracy, as reflected in the
evidence we received, the Committee supports the Government's
decision to introduce regulatory measures to combat unlawful peer-to-peer
file sharing. (para 132)
349. We welcome the decision of some companies
in the audiovisual industries to change their business models
in order to meet the legitimate demands of their customers while
generating a return on their investment in content, and encourage
other companies to do the same. (para 136)
350. We support the Government's intention to
sell a part of BBC Worldwide, creating a public private company.
We believe that such a company, with a continuing link to the
BBC, would be capable of becoming a major global brand for distributing
UK content, producing additional profits, employment and opportunities
for British production companies. (para 220)
351. We recommend the extension of the film tax
credit, on a pilot basis, to children's programmes and animation
productions made for television. This pilot, if successful, might
be extended to other genres. (para 226)
352. We welcome the provisions in the Digital
Economy Bill on support for independently funded news consortia
to provide regional and local services. (para 229)
353. Given the continuing decline in funding
for UK content provision, we recommend that the Government should
consider use of the proceeds of the sale of spectrum and a part
of the BBC licence fee. (para 239)
354. Given the current financial constraints
on the commercially-funded PSBs, we do not think it is realistic
to introduce quotas on specific genres of television programming.
(para 248)
355. We recommend that Ofcom should work more
closely with cable and satellite channels based in the UK, to
explore ways of ensuring that the aim of the rule on European
content, as set out in the EU Audiovisual Media Services Directive,
is met. (para 253)
356. Although we do not favour the introduction
of industry fees in the current economic climate, we believe that
the Government should ask Ofcom to assess research already done
on possible use of fees in the UK, and commission them to conduct
further research to reach firm conclusions on the likely costs
and benefits of such fees. This would provide a firm basis on
which Parliament might make any future decisions. (para 268)
357. We welcome the positive impact that the
Terms of Trade have had on the growth of the independent production
sector, and the benefits this has had on the sector's contribution
to UK content. We support the Government's proposal to review
the Terms of Trade, in the light of changes in the independent
production sector and the impact they can have on the commercial
PSBs. (para 273)
358. There is a serious risk that the UK will
lose out by the decision to block Project Kangaroo and we strongly
regret the Government's failure to intervene in the Competition
Commission's investigation. We urge that, if other similar UK-based
video on demand projects are proposed, the Government will ensure
that the implications for the British television industry are
properly taken into account. (para 280)
359. We recommend that the Department for Business,
Innovation and Skills should encourage the Higher Education Funding
Council to deploy some of its funding to support high-level, post-graduate
training in the post-production and animation sectors. (para 295)
360. We support Skillset's efforts to promote
dialogue between the education and training providers and the
film, television and videogames industries. We recommend that
the Higher Education and Funding Council should encourage closer
relationships between universities and the creative industries,
including the introduction of sandwich courses for media studies
degrees enabling students to spend part or all of the penultimate
year of their degree working in the industry. (para 300)
361. We welcome the work that Skillset is doing
on codes of conduct for internships, and encourage them to play
a greater role in the coordination of apprenticeships and other
on-the-job training. (para 312)
362. We urge the film and television industries
to provide more equal access to training and skills-based career
development through greater use of apprenticeships and graduate
internships. (para 313)
363. In the light of the variability of training
across the sector, we welcome the continuing role played by the
BBC and the BBC's willingness to make its training more widely
available through the launch of the BBC Academy. (para 317)
364. We understand the current pressures on the
budgets of UK commercial public service broadcasters but believe
that the reduction in training budgets threatens the future competitiveness
of the UK television industry. We urge the Government to encourage
PSBs to revive their investment in training. (para 328)
365. We regret that, because of budgetary constraints,
the UK Film Council should be forced to reduce significantly its
funding for training for the next three years, at a time when
training should be a priority. We urge the Government to ensure
that the UK Film Council is adequately funded to allow it at least
to restore its former level of support for training. (para 330)
366. We welcome Ofcom's proposals to develop
co-operation within the regulatory framework for training in the
television industry and recommend that Ofcom should publish guidance
to clarify the roles of the organisations involved. (para 334)
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