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Pinewood feels pressure

Report shows healthy film industry in the UK but Pinewood still faces obstacles, writes Kevin Hilton.

The term ‘UK Film Industry’ could be considered a misnomer, particularly by those in Hollywood, Mumbai and France, but a new report suggests that, despite still being some way away from its cinematic production heyday of the 1940s and ’50s, Britain has a healthy, economically important film base that services international and home-grown movies alike.

Compiled by business forecasting and analysis company Oxford Economics, the third edition of The Economic Impact of the UK Film Industry reports that the sector in this country accounted for £4.5 billion (€5.4 billion) of GDP in 2009, with more than £1.2 billion paid in taxation, less tax relief and various financial support schemes. The business directly employed 36,000 people in 2009, a rise of 7% on 2006 figures, and supported a further 100,000 jobs in tourism, trade and merchandising.

This performance is surprising as the UK was still in the grips of recession in 2009. The film industry began the year amid doubts about the effectiveness of the tax credits system and fears that too few international films were coming into the country.

The UK Film Council (UKFC) countered by saying that the tax-relief scheme, coupled with a favourable dollar-sterling exchange rate, was encouraging producers to come to the UK. Speaking in early 2009 Tina McFarling, the UKFC’s head of industry relations, said: “The uncertainty of 2006-07 has been replaced with a feeling of certainty. The UK is very attractive for inward investment and is competitive on a quality level, with the tax credits and exchange rate on top of that.”

The UK Film Industry report was commissioned by the UKFC, post-production companies Framestore, Cinesite and Double Negative, and the Pinewood Shepperton studios group.

Pinewood was established as a centre for British filmmaking to rival Hollywood. In recent years the group, which also includes studios at Shepperton and Teddington, has worked to reclaim that position. As well as its own sound stages and audio and video post facilities, Pinewood rents premises to independent companies, including sound designers, visual effects specialists, distributors and rental companies, in an area known as the Media Park. Tenants include Avid (European HQ) and Phoenix Sound Limited (formerly in the CTS building in Wembley).

The group’s most recent financial report, for the year to 31 December 2009, shows that its total revenue was £40.3 million, £2.6 million down on 2008, with an operating profit (before exceptional items) of £7.7 million, compared with £8.4 million for the previous year.

Pinewood’s chief executive, Ivan Dunleavy, called this a “solid performance”, saying the company was “encouraged by the growth opportunity in television [and] the performance of our Media Park revenues”.

There have been two major setbacks in the past year, however. Pinewood is historically linked with the James Bond films and in April this year Eon Productions put the next film in the series on hold. ‘Bond 23’, again starring Daniel Craig and to be directed by Sam Mendes, was due for release at the end of 2011, beginning of 2012. The financial difficulties of distributor MGM have led to it being postponed indefinitely, signalling a possible loss of significant earnings for Pinewood.

Perhaps more damaging for the group’s long-term ambitions was South Bucks District Council (SBDC) rejecting the planning application for Project Pinewood (pictured) in June last year. This grand scheme originally included plans to build the world’s first purpose-built “live work” film and television complex, with new sound stages, audio dubbing theatres and video editing suites, plus a residential development of approximately 2,250 homes.

The major objection from local residents is that it will be built on green belt land. Pinewood redrafted its proposals, pledging to keep 30 of the 44 hectares involved in the scheme as open land, building a training facility for the creative sector, as well as amenities such as a primary school and community centre, and creating up to 1,500 affordable houses and apartments.

This did not convince the council, and planning permission was turned down. Pinewood has submitted an appeal based on a Statement of Common Ground. “We are committed to going forward to get permission,” comments Andrew M Smith, Pinewood’s group corporate affairs director. “This is a long-term national investment and a project of national and regional significance, so we will persevere.”

A spokeswoman for SBDC says its planning department has set a provisional date of April 2011 for the appeal, but that this is yet to be confirmed. Pinewood is stressing the benefits the project will bring to the South Bucks area, which it says saw local unemployment rise by 57% in 2009. Smith adds that the proposal has “widespread support from sections of the local community as well as a broad range of business leaders and industry commentators”.

Despite these reversals Pinewood and Dunleavy are encouraged by the results of the UK Film Industry report. “It’s clear to see just how important the film industry continues to be to the UK’s economy,” says Dunleavy. Tim Bevan, chairman of the UKFC, adds: “This report highlights the financial and cultural benefits of a vibrant British film sector, driving growth and productivity across the creative industries.”