ICO director Catharine Des Forges responds to the recent report from the House of Commons’ Culture, Media and Sport Committee.
In 2024, I and many other colleagues from the film industry gave evidence to the House of Commons’ Culture, Media and Sport Committee’s Inquiry on British Film and High-End Television, the first such inquiry since 2015.
The Committee have now published the report on their findings. I’m pleased to say that there is much that the independent film exhibition sector can wholeheartedly welcome, with strong recommendations on capital funding, organisational funding, VAT relief, tax relief for independent distribution and more. Together, these could dramatically impact our sector’s ability to nurture and celebrate British and independent film culture, improve conditions for our workforce and best serve our audiences and communities.
In my evidence, I drew on figures from two of our recent surveys on the sector’s financial health, conducted in November 2024 and September 2023, and many conversations with organisations across the industry. Thank you to everyone who took the time to share their data and expertise with us. It has made it possible for us to advocate confidently for the sector’s needs.
A point we emphasised in our submissions underpins the Committee’s approach to many of the report’s key points related to independent cinemas: while all cinemas are important, the exhibition sector is not homogenous.
The committee recognised that independent cinemas, often operating as charities with specific cultural aims and/or receiving public funding for specific areas of activity, have a fundamentally different business model to commercial multiplexes. Independent cinemas operate with smaller profit margins, have a much broader, diverse, and more culturally focused programme, are less able to capitalise on ‘blockbuster’ successes, and typically offer a much wider range of activities such as talks, training, and community events.
We agree with the recommendation that the Government should fund the BFI’s proposals to deliver core funding, similar to Arts Council England’s National Portfolio Organisation model.
As things stand, independent cinemas can only access funding for projects rather than having core costs covered through an organisational grant, and this impacts their ability to think long-term about how they can innovate and build their programming to best serve their local communities. For larger independent cinemas, this would be a transformational change.
Yet, it is critical that this funding shouldn’t replace project funding, which still makes a big impact in allowing smaller independent cinemas with a more mixed programme to broaden and diversify the events they run, the films they show and the audiences they reach.
We agree with the recommendation that funding should include a capital funding pot to upgrade cinemas’ infrastructure and improve energy efficiency.
Our ICO survey on capital investment for independent cinemas, which will be released in the next few days, will detail how vitally needed a funding pot is after almost 20 years of no dedicated funding available to the sector.
The Committee noted that cinema infrastructure is ‘deteriorating rapidly’. The shock of the COVID pandemic, when many cinemas had to run down their reserves to stay open and with shrinking funding from local authorities, left independent cinemas with few options to undertake urgent building works, improve their energy efficiency, or fix or upgrade their equipment and interiors.
We agree with the recommendation for a distribution tax relief, which will help to grow domestic demand for British films and enable cinemas to benefit from the Independent Film Tax Credit.
The committee’s observation that ‘distribution and exhibition are not consistently appreciated by the industry or policymaking’ has certainly been true in the past. So, it’s welcome to see a change of approach where the inquiry examined the entire film industry chain.
The success of independent distributors’ marketing and PR campaigns is intricately linked to independent cinemas’ ability to deliver box office success. The committee’s suggestion of a 25% tax relief on P&A costs for distributors releasing films that have qualified for the Independent Film Tax could have a very positive impact, as independent film release campaigns need to be better supported if they are to make an impact with audiences.
We agree with the recommendation that the Government reviews the impact of a permanent cut to VAT on entry to cultural events, including cinema tickets, to identify whether it would support the growth of the creative industries.
Regarding VAT, the report notes that the temporarily reduced 5% rate introduced during the pandemic benefitted cinemas and customers and that the UK is an outlier in Europe in not applying a reduced rate to cinema and other cultural venues. This call has been echoed by other parts of the cultural sector.
We agree with the committee’s recommendation that all parts of the industry should agree to long-term, unconditional funding of CIISA.
The committee noted that the entire film industry has a problem with bullying and harassment and that this causes serious harm to individuals. Bullying and harassment also affect our sector’s ability to retain a skilled and representative workforce. The scale of the problem is significant, and previous commitments to tackle it have failed, so we agree that an independent body is vital to help secure lasting change.
The ICO is financially supporting CIISA and working with it to encourage the independent film exhibition industry to support it and adopt its four standards of safe working environments, inclusive working environments, open and accessible reporting mechanisms, and a responsive learning culture. Keep an eye out for an upcoming informational webinar we’ll run for film exhibitors in collaboration with CIISA in May.
We echo the Committee’s recommendation to rejoin Creative Europe as an associate member.
Participating in Creative Europe had direct material benefits for the exhibition sector. Many cinemas could access funding to support screenings of European cinema via Europa Cinema’s schemes. UK distributors could also access distribution support for UK releases of European titles via Creative Europe, which proved essential in the UK’s expensive media buying environment.
While the BFI’s Global Screen Fund has sought to address outward investment in UK film, inward investment in supporting European cinema in the UK has not found its equivalent. Participating in Creative Europe is also an opportunity for the UK to position itself as a leader in exhibition. Via our Developing Your Film Festival course, the ICO set the agenda for festival excellence across Europe and the world, supported by Creative Europe funding. This is without mentioning the powerful network effect of sharing thought leadership with other European exhibitors that was facilitated by Europa Cinemas.
We’re pleased to see the Committee recognise the importance of having a representative and skilled workforce in the independent film exhibition sector.
A healthy cultural sector gives voice to and speaks to everyone, regardless of race, gender, disability or socio-economic background. The committee notes that the workforce remains unrepresentative and that this issue is particularly acute at the senior level. They acknowledge that people from underrepresented groups often struggle to find initial routes into the industry. While some progress has been made, it notes that it often falls to grassroots organisations to attempt to tackle the problem.
Film exhibition has a long way to go to be a truly equitable and inclusive industry. Systemic change is hard to achieve, but we would urge our colleagues in the film exhibition industry to tackle these issues as a matter of urgency, looking at models of equitable recruitment and improving conditions so anyone can feel working in the industry is for them and somewhere where they want to stay and build their career.
Practically speaking, more support is needed for traineeship schemes in our sector. Having run a scheme focused on Black, Asian and ethnically diverse talent for a decade, we can now see the impact as former trainees move into senior roles in the industry and make an impact with audiences. But if we want to continue to nurture talent, we must have consistency of support for opportunities to embed them in the industry.
Seeing the new Government appreciate the cultural sector’s importance in generating economic growth in the UK has been heartening. Their proposed Industrial Strategy recognised the creative industries as one of the eight growth-driving industries.
This report shows pathways towards action for the government to ensure that the independent film exhibition sector can unlock economic and cultural opportunities for growth in our communities.