30/04/2010

Pact, the trade body for independent producers, has announced a proposal for the public funding of UK film production, which plans to create a sustainable film sector without the need for more public money.

The key proposals are:

- 100% of the recoupment of public investment should accrue to the UK production company, with 70% of such funds set aside for future development and production via the Film Depository Receipt (FDR) system;

– The FDR system is a “lock box” where 70% of monies recouped are placed on the production company’s behalf, in an interest-bearing escrow account to be accessed only by the production company for use on future films;

– 100% of the tax credit should be treated as producer’s equity investment and this amount would therefore sit in the recoupment account;

– Support for the House of Lords Communication Committee’s proposal for the tax relief level to be raised from 20% to 30% on UK films with a budget of less than £5 million;

– A new deal structure with new terms including a reduction in the length of the broadcast licence period to five years and a “use it or lose it” provision where rights revert to the producer if the broadcaster is not using them;

– Public entities to agree a pro forma set of principal legal documents to save time and money.

Pact CEO John McVay said, “This is not about seeking more funds. It is concerned with using what is already on the table to create organic growth: growth that is based upon success rather than subsidy. For too long the sustainability of the film production sector has remained an elusive goal, but it’s a crucial goal and one we believe is achievable if film producers are given the opportunity to share in the success if their film does well.”