UK Film Council faces $33m drop in funding

The cuts will mean an expected 15% reductionin the amount of lottery money available to British film - a drop of around $6.5m (£4.4m) a year.

This year’s UKFC budget is unaffected up until next April but the cuts will begin to have an impact from next year. Money from the National Lottery will be key to funding the London 2012 Olympics, and UK arts and cultural organisations are preparing for a drop in the revenue they receive from the national lottery as a result.

The cuts will be a blow for UK film makers who rely heavily on the UKFC funds through a number of schemes to help get British movies made.

The UKFC has an annual budget of almost $104m (£70m), with around 46% coming from lottery funds, 40% from government support through grants, and the remainder from investments and other sources.

It is not yet known whether the level of support from government funding could also be hit, with the cost of staging the Olympics rising significantly from $3.6bn (£2.4bn) to over $13bn (£9bn).

A UKFC spokesperson said: ‘We have known for some time and we have been planning and making provision. We’re planning how to go forward in a climate where we know we’re going to have less money.’

The UKFC is in discussions with the BFI and with regional agencies to discuss how they will be affected and how to plan for the future.

A Screen South West agency spokesperson said: ‘The UKFC is currently running scenario planning exercises so we are best prepared for any drop in funding. We are expecting any drop to kick in 2010/11. We will not know how affected we will be until later in the year.’

The UKFC was established in 2000 and employees 90 people. It supports British film through a number of funding initiatives (see box), including a $24m (£16m) contribution to the running of the BFI.

The Premiere Fund $12m (£8m) - headed up by Sally Caplan whose remit is to invest in mainstream, commercially-driven films and to encourage British creative talent. The fund recently invested in Stephen Poliakoff’s Glorious 1939 and Sam Taylor Wood’s Nowhere Boy.

New Cinema Fund (headed up by Lenny Crooks), the Development Fund (headed up by Tanya Seghatchian), Distribution and Exhibition (headed up by Peter Buckingham), account for $20m (£13m) of the budget spend. For the 2007/2008 tax year the UKFC also gave just under $12m (£8m) to nine regional screen agencies including EM Media which part funded Bronson and Screen Yorkshire which helped fund The Damned United.