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It's been a good year for production,' says British film commissioner Colin Brown, of feature film-making in the UK in 2007. His assessment is supported by figures released by the UK Film Council earlier this month.

Inward investment spend reached an impressive $665m (£324m) for the first half of 2007; its strongest half-year performance since 2004. This robust activity is reflected in high-profile shoots including Walt Disney Pictures' The Chronicles Of Narnia: Prince Caspian; DreamWorks' Sweeney Todd: The Demon Barber Of Fleet Street; Warner Bros' Batman Begins sequel, The Dark Knight; New Line Cinema's The Golden Compass and Universal's Abba musical Mamma Mia!

It is a telling contrast to industry anxieties surrounding levels of production in early 2006, with the loss of a number of big projects, notably portions of Casino Royale, to Eastern Europe because of the strength of the pound against the dollar and the uncertainty over the UK's tax credit system.

The currency exchange rate remains high, but Brown believes there is now confidence in the new tax relief and in the quality and depth of the crew available.

'If you've got 12 big movies shooting here, you still haven't scraped the bottom of the barrel in terms of crew,' he says.

'People have gone elsewhere because the hourly rates (for crew) are cheaper. If you've got a set build, it could potentially be cheaper. But producers haven't done the calculations on how long it's going to take to build the set, so if it's half the cost but twice the time you've got no savings and an added delay.'

The inevitable beneficiaries of this upturn are the established studios in and around London, especially Pinewood Shepperton, which caters for most productions that shoot in the UK.

'2007 has seen marked confidence for our (feature film) customers,' says Pinewood's marketing director, Nick Smith.

The studio is now seeking planning permission to expand its premises by another 105 acres to include permanent working street sets and location recreations such as an amphitheatre, castle, Venetian canal, Italian lakeside and street scenes from London, New York, Paris and Los Angeles.

The caveat to the Pinewood Shepperton success is the impact of the Hollywood writer's dispute which has already cost one film, Angels & Demons. Click here for more.

The impact is most impressive in the dramatic rise in high-profile productions shooting outside the capital and taking advantage of the UK's unique sites of historical interest. Productions set to light up the second half inward investment figures include Icon's period drama Bronte, which will shoot in Yorkshire later this year.

Other projects include Focus Features' The Other Boleyn Girl, starring Natalie Portman and Scarlett Johansson, which filmed at Haddon Hall in Derbyshire and wrapped last month; Initial Entertainment Group's The Young Victoria, which took advantage of Belvoir Castle and Lincoln Cathedral; Miramax's Brideshead Revisited, which shot around Yorkshire, including Castle Howard and the Yorkshire Moors; and BBC Films and Pathe's $30m The Duchess, starring Keira Knightley as the 18th century aristocrat Georgiana, Duchess of Devonshire, which filmed in Derbyshire and Norfolk.

Acknowledging the challenges created by the strength of the pound, The Duchess producer Gaby Tana admits she considered filming outside the UK but decided 'the quality of the British crew is cost and time effective'. Moreover the cost of recreating the English stately homes of the period would have been prohibitive.

'Locations are part of the talent. We would have spent so much money building, that even if we were abroad where things are cheaper we probably would have spent the same amount.'

Encouraging these film-makers to take advantage of the landscapes and sites is the job of the 12 national and regional screen agencies, including the UK Film Council, EM Media and North West Vision (NWV).

As Chris Moll, head of production at NWV, which covers Manchester, Cumbria and Liverpool among others, says: 'Locations are a key driver in attracting projects.' NWV also offers a free film-liaison service to help the shoot run smoothly.

The various screen agencies also administer production funds, which prove useful leverage in attracting projects (with guarantees the budget spend in the region will be a negotiated multiple of the original figure).

This summer for instance Screen Yorkshire made an equity investment of $512,000 (£250,000) in Brideshead Revisited. Andrew Craske, head of communications at Screen Yorkshire, does not underestimate the impact this could have on visitor numbers to the film's main location, Castle Howard, which is where the iconic 1980s TV adaptation of Brideshead was shot: 'There are still people who visit it from the TV series,' he says.

However, Moll is not convinced the limited money is best spent on larger budgeted movies. 'If you have a $61m (£30m) US production, a $512,000 (£250,000) investment isn't going to make a huge difference'.

Of greater importance, is the logistical support they can offer. Colin Brown gives the example of the Northern Ireland Screen agency's collaboration with Walden Media/Playtone's fantasy film City Of Ember. 'They wanted to build sets so tall you could only do them at Pinewood,' he says. 'So instead they used a tall structure in Belfast's former shipyard and converted it into a studio. The whole thing was shot in Northern Ireland.'

The arrival of major productions to the various regions will also improve the quality of local crews, leaving them better equipped to cope with future productions, so benefiting both parties. 'Fostering local talent is one of our key objectives,' says Lee Thomas, head of production at Screen West Midlands, which provided logistical support for Working Title's Atonement.

Screen West and other agencies also acknowledge that financial investment is more effective on smaller projects. With a maximum investment of $1m (£500,000) - most of the other agencies are capped at $512,000 (£250,000) - Thomas says: 'Films budgeted at under $10m (£5m) are where our money is going to make a difference. That's where we can insist on a real regional focus, through locations or using local talent.'

Ken Marshall, producer of dark comedy The Cottage, budgeted at around $5m (£2.5m), received an investment from Screen Yorkshire just under its $512,000 limit. He says its contribution 'was a big factor in helping close the finance'. Shooting a little less than half of the film just outside Leeds earlier this year, Marshall had to guarantee a spend in the region three times Screen Yorkshire's original investment.

Despite a good 2007, there are nagging concerns about the future of the screen agencies' production funds. Much of their production money is raised from European Regional Development Fund sources, due to be re-directed to the new member states of Eastern Europe in 2008.

'Expectations are there now that you can get regional money to complete your budget, but come December 2008 it all changes,' says Thomas, adding that the Film Council is lobbying regional development agencies throughout the UK to support their film agencies. 'The European money is going to dry up,' says Moll, 'I wonder then what the long-term future of regional funding will be.'

UK TAX CREDIT

To qualify for the UK tax credit, a film must:

- be made to be shown commercially in cinemas

- be certified as British either because it is an official co-production or because it satisfies the new cultural test

- incur at least 25% of its total production expenditure on film-making activities in the UK.

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