Studios: the UK's capacity crunch

These are seemingly boom times for British film studios. As we enter the summer, several very large budget films are preparing to shoot in the UK.

Kenneth Branagh’s live-action, Disney-backed Cinderella will be made at Pinewood as will Marvel’s Guardians Of The Galaxy. JJ Abrams’ new Star Wars film is also expected to shoot at Pinewood as is Avengers 2.

Over at the Warner Bros Studios Leavesden, the Wachowskis are shooting Jupiter Ascending. Rush director Ron Howard has exchanged Formula 1 cars for the world of whale hunting with his new feature In The Heart Of The Sea. Meanwhile, The Man From UNCLE is also revving up at Leavesden.

Sitting alongside the film tax credit, the new high end television tax relief (which became available from April 1 this year) is expected to increase the pressure on the UK’s studios even further. 

The question is whether the UK has the capacity to cope with a potential influx.

According to a PwC market review commissioned by Pinewood Studios and published in January, “the demand for suitable studio space in the UK currently appears to be exceeding the available supply.

The report argued that capacity constraints were beginning to not only disadvantage Pinewood - which was potentially having to turn away productions due to lack of space -but also the performance of the wider UK film economy, as there may not necessarily be space elsewhere in the UK for those international productions to go.

Iain Smith, chair of the British Film Commission, backs this up: “As a result of the new tax relief, a surge in production demand is now anticipated, both for incoming international television business, but also for returning domestic production,” says Smith, adding, “it is clear that the traditional facilities of the south-east will no longer be able to cope with this surge, even with Pinewood and Leavesden trying to expand. There is even an increasing danger that Britain may lose production of the James Bond franchise to overseas if stage capacity is not increased.”

In mid-May, Pinewood Studios’ plans for a £200m expansion scheme were rejected by South Buckinghamshire Council, who cited environmental concerns.  The scheme was calling for 15 more stages, more workshops, another backlot and more production offices.

Pinewood has submitted an appeal against the rejection of its expansion plans. A final decision is expected early next year.

Whatever the result of the appeal, the debate about whether the UK’s film infrastructure can cope will only intensify in coming months.

On the face of it, the UK seems well equipped with studios. Alongside Pinewood Shepperton and Leavesden, the UK has Elstree, Ealing, 3 Mills, Twickenham, The Paint Hall in Belfast (home to Game Of Thrones), Dragon Studios in Wales, and Wimbledon Studios. There are also increasing numbers of “Alternative Stage Spaces”, with Film London chief-executive Adrian Wootton explaining that the UK is “nowhere near at pinch point” as far as capacity in concerned. “We are trying to future proof any problems. There has been some sabre rattling from our competitors around the world saying, ‘oh, it’s going to be too full in London and the UK.’”

Certainly, the British Film Institute’s statistics for film production in the UK in the first quarter of 2013 don’t support the idea that British studios are at full capacity.

• Click here for the full BFI stats

The year started surprisingly slowly, with the aggregate UK spend of features for the first quarter amounting to £84.5m, down from £149.1m in Q1 2012 (itself a relatively soft quarter.)

Nor was high-end TV drama clogging up the sound stages. Following European Commission state aid approval earlier this year, the BFI Certification Unit began accepting draft online applications and issuing letters of comfort for high-end television and animation programmes under the cultural test. By early June, the BFI had received only three draft applications for High End TV and had issued three letters of comfort.

When full applications launch and certificates begin to be issued - which is likely to happen in August - it will become far clearer how much high end TV and animation is UK-bound.

But as Andrew M Smith, director of strategy and communications at Pinewood Shepperton PLC, points out, in the early part of this year, there were a number of productions that pushed back their start dates. “If you look at the trend of inward investment, you will see it is an upward curve,” Smith commented. “If you look at what the heads of physical production are saying in the US studios, they need more facilities. You are seeing the trend for bigger budget films that are requiring physically more space, more studios, more workshops and more production space.”

Smith also cites the cautionary tale of 2011, when several big budget films had to be turned away because the UK was “full.” (For example, 47 Ronin ended up using Hungary for stages as there was nothing available in the UK other than the back lot at Shepperton.)

Alison Small, chief executive of the Production Guild, which represents the UK production sector on UK and international productions across film and television, points to the word from her members that “there is a great deal of production activity underway which is a real indicator of actual business activity.”

Looking ahead, Small is calling for as much attention to be paid to expanding the skills base as to ensuring that studio capacity can meet burgeoning demand. “This is why the Guild welcomes the linking of a levy attached to the tax breaks which will fuel the new Skills Investment Fund being administered by Creative Skillset, and why the Guild continues to prioritise providing essential training for the production management and accounting workforce,” Small comments.

As Creative England’s chief executive Caroline Norbury points out, global competition is intensifying. “In terms of film production and also games production, what you are seeing is an awful lot more at the high end, high cost, high budget level,” Norbury reflects. “If the UK is to remain competitive in the high end film side, there is a definite case for investment in more infrastructure.”

Earlier this spring, TV executives from companies including ABC, Starz, the Mark Gordon Company, Sony, Gaumont International, CBS, New Regency Television, NBC Universal and HBO came to the UK on a “familiarisation” trip. Many were reportedly looking for “cheaper build spaces,” factories, warehouses and old industrial complexes that can be customised for filmmaking. Norbury reports “nine serious inquiries” since the high end television tax relief was introduced. “What they want is cheap space and they want a decent skills base. They want to be able to build something, use it for six months and leave it dormant for six months.”

Some are worried that Scotland, the only area of the UK which has no significant dedicated shooting space to offer, may be left behind as an anticipated production boom continues across the UK. 

“If nothing continues to be done north of the border, and we miss this window of opportunity, quite apart from being a major blow for Scotland, it will be letting down the UK national side by diminishing the UK offer at a time when we simply must not turn away new production business to competitive territories,” British Film Commission chair (and Scottish producer) Iain Smith says of the pressing need for a dedicated shooting centre in Scotland that can host television drama as well as film.

Even without such facilities, Starz’s Outlander series is expected to shoot in Scotland later in the year.

Long-term observers of the UK film studios point to the cyclical nature of the business. Currency fluctuations, shifts in tax regulations and changes in taste can have a very sudden effect on which movies decide to migrate where. However, others argue that there is now an opportunity to improve the infrastructure in such a way that the old lulls can be avoided.

In terms of inward investment, these are already halcyon times for British studios. In spite of the soft start to the year, there will be plenty of high end TV and film production in the UK in 2013. The pressing question, according to Pinewood’s Andrew M. Smith, is whether the Brits will have capacity and skills base to keep the current run going.

“It will be an absolute tragedy if the Government has introduced all these tax reliefs to attract business and the UK can’t cope with it,” Smith reflects. “It would be like shooting yourself in both feet.”