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Major new report shows that UK film contributes over £4.5 billion to UK GDP, supports 100,000 jobs and is weathering recession well

The UK film industry contributes a total of over £4.5 billion a year to UK GDP and more than £1.2 billion to the Exchequer, according to an independent report published today by Oxford Economics.

London – Monday 7 June 2010

The UK film industry contributes a total of over £4.5 billion a year to UK GDP and more than £1.2 billion to the Exchequer, according to an independent report published today by Oxford Economics.

The Economic Impact of the UK Film Industry – commissioned by the UK Film Council, Pinewood Shepperton plc, Framestore, Cinesite and Double Negative – concludes that the UK film industry is substantial, is weathering the recession well, and its long-term trend is one of strong growth and expansion.

The report also concludes that the UK's film tax relief is vital to sustaining current levels of global competitiveness and job creation. Without the UK film tax relief in place, UK GDP would be reduced by around £1.4 billion a year. That compares with a current cost of the film tax relief of around £110 million a year, meaning that an extra £13 in GDP is generated for every £1 invested.

Welcoming the report's findings, Minister for Culture, Communications and the Creative Industries, Ed Vaizey said, "The creative industries are a British success story. They continue to grow, and the government sees the real potential they have to help our economy in the coming years. This report is evidence of how important British film is – to our economy as well as promoting our cultural life, our identity and diversity on the international stage."

Specifically, the report examines the many ways in which the UK film industry contributes to 'UK plc', including:

  • Jobs – the UK film industry directly employs around 36,000 (up by 30% since 2000 and 7% since 2006), supporting a total of 100,000 direct and indirect jobs (up from 95,000 in 2007);
  • Skills – the UK film industry provides jobs for some of the UK's most highly qualified workers, with 58% of the production workforce university educated and London having a global market share of approximately 20% in film visual effects work;
  • Multiplier effect – for every job supported in the core UK film industry a further job is supported through indirect and induced multiplier effects. In addition, the showing of UK films helps UK TV broadcasters generate about £245 million of revenues. Total multiplier activity contributes a further £1.6 billion a year to UK GDP and £425 million to UK tax revenues;
  • Between 2000 and 2009, fixed capital investment in infrastructure and new technology has totalled almost £1.1 billion. In 2009 alone, capital investment in the core UK film industry is estimated to have been £147 million, with most of the investment undertaken in the production sector;
  • Inward investment is estimated to account for around £3.6 billion of film's contribution to GDP and £960 million in Exchequer revenues;
  • Exports – in 2008, UK film exports totalled around £1.3 billion;
  • Culture – British films are important to UK audiences. A film shown in the UK can expect its box office to be up to 30% higher if it is indigenous. On this basis, UK films are estimated to have boosted the box office revenues by an average of around £60 million a year over the last decade;
  • Tourism – films depicting the UK are responsible for generating around a tenth of revenues from overseas visitors, totalling around £1.9 billion a year;
  • Regional support – the film industry directly supports around 2,200 jobs in the South West of England and 2,100 in the North West;
  • Merchandising – merchandising associated with UK films supported about 6,600 jobs in 2009 and contributed about £237 million to UK GDP and £107 million to the Exchequer.

Tim Bevan, Chairman of the UK Film Council, said that the UK film industry's economic contribution is growing in spite of the wider challenges it faces, adding: "This report highlights the financial and cultural benefits of a vibrant British film sector, driving growth and productivity across the creative industries. With world-class film facilities, a highly-skilled workforce and effective government support, including a film tax relief that provides certainty for business, the British film industry is firing on all cylinders and is well-placed to play an increasingly valuable role helping the UK economy grow in the years ahead."

Ivan Dunleavy, Chief Executive of Pinewood Shepperton plc, commented:"It's clear to see just how important the film industry continues to be to the UK's economy. The new coalition government has been extremely positive in recent times on issues such as the film tax credit which, along with the UK's skills and expertise, has helped to keep the UK competitive in a global market. The industry also needs to play its part. Investment in facilities and long term infrastructure projects, such as Project Pinewood, need to continue in order for the UK to become a hub for the hi-tech digital and creative industries of the future."

The full report, The Economic Impact of the UK Film Industry, can be downloaded at:

http://www.ukfilmcouncil.org.uk/media/pdf/i/r/The_Economic_Impact_of_the_UK_Film_Industry_-_June_2010.pdf

For more information, please contact:

Oliver Rawlins
T: 020 7861 7505
M: 07855 326362
E: oliver.rawlins@ukfilmcouncil.org.uk

Oliver Foster
T: 020 7861 7508
M: 07920 560509
E: oliver.foster@ukfilmcouncil.org.uk

Tina McFarling
T: 020 7861 7900
M: 07879 421 578
E: tina.mcfarling@ukfilmcouncil.org.uk


Notes to editors

Summary of the economic contribution of the core UK film industry

Channel of impact

Total contribution to UK GDP in 2009

Total contribution to Exchequer revenues in 2009

Employment impact in 2009

Direct

£1,594m

£445m

36,000

Multiplier (indirect and induced plus TV)

£1,714m

£425m

36,000

British film box office effect

£59m

£18m

350

Tourism

£950m

£210m

20,000

Promotion/trade

£20m

£5m

700

Merchandising

£237m

£107m

6,600

Total

£4,574m

£1,210m

99,650

  1. The analysis in this report covers economic activity which arises in the UK from companies or individuals employed in film production in the UK (including pre- and post-production); the distribution of UK-made films; and the exhibition of UK-made films. Economic activity associated with the distribution and exhibition of UK films made abroad is not included. £m = £ million.
  2. The new film tax relief applies to films which started principal photography on or after 1 January 2007 and to films starting principal photography before 1 January 2007 but uncompleted then. For more details on the film tax relief and the Cultural Test go to http://www.ukfilmcouncil.org.uk/qualifying
  3. The UK film industry receives funding from both central and local government, from the National Lottery and other public sector organisations, and from the European Union. Across all sources, total public funding for film was estimated to be £256 million in the financial year 2008/09. Of this, the largest single contributor was the UK Film Tax Relief, which at £110 million accounted for 40% of the total.
  4. The UK Film Council is the lead agency for developing the UK film industry and film culture in the UK, with its aim being to deliver lasting benefits to the industry and the public alike.
  5. The UK Film Council invests around £60 million a year in film (after the transfer of £5 million a year to the Olympic and Paralympic Games) which comprises £26.9 million from the National Lottery, £25.6 million DCMS grant-in-aid, nearly £4.9 million recoupment on films and £2.5 million in one-off DCMS project grants.
  6. The UK Film Council's main initiatives to help build a stable and growing UK film industry and develop film culture in the UK include:
  •  The Film Fund - £15 million a year to support filmmakers in making quality British films;
  • The Innovation Fund - £5 million a year to help the UK film sector make a successful transition to a fully digital age;
  • The Film Skills Fund - £3.25 million a year via Skillset to ensure a strong, consistent supply of skilled and talented professionals in line with market need;
  • The Prints and Advertising Fund - £2 million a year to support the distribution of a broader range of films to audiences across the UK;
  • International development – to encourage international productions from outside the UK to come and use Britain's world-class production and facilities infrastructure;
  • Diversity activities – aims to help the sector build a more diverse, inclusive workforce and film culture by nurturing film talent, integrating equality and diversity commitments into all UK Film Council activities, and providing practical tools to the industry to promote diversity;
  • National and Regional Screen Agencies – £6.3 million a year to fund regional film bodies across England and, working with the agencies for Northern Ireland, Scotland and Wales, to support production, screen commissions, cinema exhibition, archives and education;
  • BFI – The British Film Institute receives £16 million per year from the UK Film Council to champion moving image culture, education and cinema heritage for the benefit of as wide an audience as possible and to encourage public debate about film.