Tax rebates worth more than £4bn over six years have helped fuel a boom in UK film and television production that has transformed the country into a global entertainment hub but also raised concerns about shortages of staff and facilities.
Data from the British Film Institute show expenditure on films and high-end television this year will easily surpass previous records as groups including Netflix, Disney and HBO turn to British talent to meet voracious demand for streamed video.
The latest instalments of the Batman, Mission: Impossible and Indiana Jones movies are among several Hollywood releases filmed in the country, yet the biggest surge has been in scripted TV.
Homegrown companies have created several worldwide hits including Peaky Blinders and Line of Duty, while international producers have recently shot dozens of big-budget series such as Bridgerton and The Witcher in the country.
Ben Roberts, the BFI’s chief executive, said the UK had become a “first port of call” for the world’s largest media companies.
The onset of the pandemic caused a hiatus, but crews returned to sets quickly when restrictions were relaxed. Total spending on movies and high-end TV is set to top £5bn this year, more than double the total in 2015 and almost six times higher than 2007, when the tax relief was introduced.
Production companies can claim up to 25p from HM Revenue & Customs for every £1 on qualifying expenditure. Since the system was brought in it has been extended to related sectors including animation, children’s TV and video games.
Financial Times estimates based on BFI figures show film and high-end TV productions alone have been eligible for about £4.4bn in rebates since 2016 — including about £940m in the first nine months of 2021.
“There are many territories around the world that run very competitive tax reliefs, and some of them have become more competitive,” said Roberts. But he added that other factors, not least the English language, also made the UK attractive.
The threat of industrial action by workers in Hollywood had further encouraged US companies to consider Britain, executives said.
The boom is set to continue next year, when Amazon is due to begin filming The Lord of the Rings. The streaming giant has abandoned New Zealand in favour of the UK for its second season.
Yet the arrival of such productions has put filming infrastructure under strain. Studios such as Pinewood and Shepperton are being booked up by the largest companies that are committing to increasingly long-term leases, creating a problem for those on smaller budgets.
“I’ve heard of farmers being approached to have cowsheds converted” into production facilities, said Ryan Dean, an entrepreneur who is planning to open a studio development in west London next year. “People in their desperation are turning to anywhere and everywhere.”
Bigger property developers also see an opportunity to fill the gap. Among the projects under way is one of Europe’s largest TV and film production hubs in Broxbourne, Hertfordshire, part funded by Blackstone, the US investment group.
James Seppala, head of Blackstone Real Estate Europe, said: “The infrastructure has not kept up with the explosive demand growth. There’s almost no studio space across the UK at the moment.”
Availability of behind-the-scenes workers is an even greater problem, although at least part of the staffing shortages are explained by temporary coronavirus disruption. Make-up artists, lighting technicians and even production accountants are among the positions in high demand.
Julian Bellamy, managing director of ITV Studios, said the boom was “fundamentally really good news for the UK” but that “there are some challenges that come with some of it”.
“There’s no question that there are some pressure points, for example around talent shortages,” he said.
The influx of foreign capital is also changing Britain’s production ecosystem, which has long been supported by the BBC and other domestic networks.
Public service broadcasters are required to commission from smaller producers and allow them to keep potentially lucrative intellectual property rights, letting them sell hits overseas. The likes of Netflix are under no such obligations.
Lucas Green, global head of content operations at Banijay, owner of UK production companies including Tiger Aspect and Shine TV, said: “It’s about making sure that, if you have invested the time and the money, you control the destiny of those hits. That has always been key to the UK’s fertile creative landscape.”
Despite the challenges, few in the industry see much downside to the boom.
London and the south-east have long been the most important centre, but other areas have also capitalised. In recent years, Game of Thrones has been shot in Northern Ireland, Outlander in Scotland and Sex Education in Wales.
The sector is an increasingly important employer. Tax relief-supported screen production generated about 156,000 full-time jobs in 2019, up almost a fifth from 2017, according to the BFI.
Its report found that, combined with the related sectors supported by creative tax relief, the total overall contribution to UK output rose more than half between 2016 and 2019, to £13.5bn.
Rishi Sunak, chancellor, hailed the boost to the economy. He said in a statement: “Our tax reliefs make the UK an attractive place to film and are driving a wave of private investment.”
Bellamy of ITV Studios said the competition for talent and facilities was a “quality problem” to have. The company unveiled plans last week to double its output of big-budget scripted drama over the next five years.
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