money10.jpgUPDATE: Wuthering Heights producer Kevin Loader has weighed in to the debate about converting public film investment into grants. Producers have called for the UK Film Council and broadcasters to waive any expectations of a return when investing in indie films. That way, say producers, they can use the money to grow their businesses and attract outside investment. Loader says that what is being proposed will cut out “the current legions of high-charging middle-men whose charges and fees are taking too high a proportion of the average UK film budget”. He tells me that what producers’ are calling for is more a more organic way of building the industry than a decade of top-down UK Film Council interventions. It strikes me that it is always the middle-men financiers who get thumped in these debates. But aren’t we all a middle-man for something?

PREVIOUS: I’m getting a muted reaction to the latest set of proposals made by British producers through their lobbying body Pact. Officially, the UK Film Council won’t comment on what it thinks. Neither will public service broadcasters the BBC and Channel 4 say what they really think, apart from the usual platitudes. But I’m hearing that all the public funders have been underwhelmed by what producers are asking for.

Producers have called for public funders such as the UK Film Council, the BBC and Channel 4 to forget any recoupment when they invest in British films. Instead, any recoupment would be put in escrow for future development and production. Pact says this is the only way British independent producers can grow their businesses. Production investment in British indie films has fallen by more than one third since 2003. The trade association enjoyed an enormous coup back in 2003 when it successfully argued for indie TV producers to retain overseas rights to their programmes. This triggered a wave of City investment in indie TV producers. Now Pact hopes to do the same for the indie film community.

Pact has also asked for regional funders such as Scottish Screen or Screen Yorkshire to waive their recoupment too. Hugo Heppell, head of production at Screen Yorkshire, told me he thought Pact was living in “fantasy land” with these proposals. Regional screen agencies – unlike the UKFC and the broadcasters – do not get their funding replenished each year. “Pact’s proposals show a complete lack of understanding of the way that regional public funding works,” Heppell says. “The idea that we can exhaust these funds, whose money comes from the EC and whose managers expect a return, just isn’t tenable.”

John McVay, CEO of Pact, tells me that he is not surprised by the response. “But clinging on to the past is not an option. The question is how do we enable independent British producers to stop being so reliant on subsidy? Public money is meant to help producers make great films, not support bureaucracy.”

Pact also wants to see financiers treat the UK tax credit as producer’s equity, rather than clawing it themselves; TV broadcasters to cap the length of time they license a film to five years; public funders to use standardised legal documents, saving money and time; and for the tax credit to be raised to 30% on features costing less than £5 million.

“I accept that it’s Pact’s job to think the unthinkable,” says film financier Heather Mansfield of Mansfield Associates, “and some of its previous campaigns — which seemed unwinnable — have ultimately succeeded, but most of this is just not going to happen in the current economic climate. There is too much reliance on state handouts in any case, and this is simply unrealistic.”

In many ways, the producers’ association has suffered from its own success. For years it was part-funded by UK broadcasters including ITV, Channel 4 and Five. Pact paved the way for the boom in indie TV producers. Broadcasters resented the growth of indies such as Endemol and All3Media. They pulled their funding. Pact had to shed 60% of its staff including its director of film. Meanwhile, the British government is in lockdown pending the national election on May 6th.