Posts Tagged 'evidence based policy'

Counting the Creative Industries (or why South Lanarkshire is the creative economy capital of Scotland)

Delving into the employment and industry statistics for Scotland is a revealing and at times surprising enterprise.  Who would have thought that the Scottish district showing the greatest proportional increase in people working in ‘Culture, Media and Sport’ would be South Lanarkshire? Back in 2004 some 800 people (0.3% of the total population) were counted in that category but by last year the figure had risen an impressive 175% to 2,200 (0.7%).  That’s 1,400 new jobs and some 13% of the recorded increase for Scotland as a whole!  (Only Edinburgh surpassed it in absolute terms with an increase of 2,300 jobs, a more modest 42% increase in proportional terms, though better than the all-Scotland 29% increase from 35,800 to 46,200.)

Quite how the home of New Lanark, the UK’s largest museum of country life at Kittochside and Biggar Puppet Theatre, has pulled off this impressive bit of economic development can’t be discerned from the figures but one can’t help wondering if some re-categorisation of employment data may have played a part.

Statistics, as we all know, can easily be made to say what you want them to, particularly if you choose your comparison periods carefully, tweak data definitions and quietly ignore things like adjusting for inflation.  Obtaining reliable comparative data for the Creative Industries at regional, national and international levels is notoriously difficult but utterly essential if meaningful evaluation of cultural and economic policy is to be possible. Similarly, comparing economic and cultural data over extended time series is central to analysing the impact of public policy.

Back in 2005 the Office for National Statistics discovered they had been seriously over-estimating business data covered by SIC (‘Standard Industrial Classification’) Code Division 92: ‘Recreational, Cultural and Sporting Activities’ which ranges from ‘Motion Picture and Video’ to ‘Gambling and Betting’. 

If you didn’t know this then the following table would look rather alarming as it appears to show a pretty catastrophic drop in the Gross Value Added generated by this major part of Scotland’s Creative Industries between 2004 and 2005 (when the data was adjusted).

Scotland Recreational, culture and sporting activities 1998 to 2008 Graph

These sorts of difficulties make getting a handle on how Scotland’s Creative Industries are doing less than straightforward.  The ONS and Scottish Government Annual Business Inquiry tell us (see also Arts and Business report ) that Scottish Creative Industries GVA rose some 84% from £1.3 billion in 1998 to £2.4 billion in 2007.  Employment in the sector is said to have increased over 50% from 38,500 in 1998 to 58,600 in 2007. 

Some interesting trends are revealed when we drill a little further into this data.  For example the sector showing the sharpest increase is Advertising (194%) while Publishing (32%) and Film/Video (32%) appear to be equally in the doldrums, at least according to these figures.  Music and the Visual and Performing Arts appear, by contrast, to be in pretty rude health (176% increase in GVA over the decade).

What if anything should we conclude from this mass of data, potentially unreliable as in some cases it clearly is?  Well one thing we should be looking at is why growth rates are so markedly different across sectors and whether for example, economic policy interventions should prioritize the ‘leaders’, on the basis of building on growing areas or the ‘laggards’, on the basis of correcting market failures or distortions.  Though some sectors (e.g. advertising) are acutely sensitive to cyclical market conditions while others (e.g. film, architecture) can be significantly affected by a few lasrge value projects, there are underlying structural factors – e.g. skills, access to investment and working capital, impact of technology change – that public policy can help to address.

NB: For the avoidance of doubt, as the lawyers say, I am only referring here to considerations of economic policy. There are of course many and varied cultural and social policy reasons to invest in the creative and cultural sector – the complex interplay of these with industrial and economic policy is an issue for (many) other posts here and elsewhere – seefor example Pat Kane’s recent and considered words in the Caledonian Mercury .

Going back to South Lanarkshire, if it really has more than doubled employment in Culture, Media and Sport perhaps the Scottish Creative Industries Partnership (SCIP) ought to pay a visit to see how they did it, particularly as the local Government representative on SCIP is Leader of North Lanarkshire Council!

UPDATE/FLASHBACK: For more on the shifting sands of creative industries re-visit this earlier post https://robinmacpherson.wordpress.com/2010/05/28/how-new-is-the-new-creative-economy-and-is-it-really-shrinking/

Toronto swansong for UKFC

As the Guardian film blog notes it is indeed richly ironic that in the year its demise was announced, UK Film Council-backed films should be making such a strong showing at the Toronto Film Festival. Amongst the 13 UKFC-backed films (out of 29 British in total )  Tom Hooper’s UK/Australian Co-pro The King’s Speech won the Cadillac Audience Award with another Brit pic, Justin Chadwick’s First Grader taking the runner-up prize. But then again the decision to axe the UKFC wasn’t, as far as anyone tell, predicated on an alleged failure to back enough successes or, indeed, on any coherent analysis at all.  It appears to have been the result of a few key individuals (at least one of them a prominent ‘commercial’ filmmaker) bending UK Culture Secretary Jeremy Hunt’s ear and accusing UKFC executives of milking the public purse.  Facing cuts to his own department of up to 40% it seems the Minister was goaded into precipitate action ‘pour encourager les autres’.  Britain has a long history of see-sawing film policy going back to the thirties and this latest example of ministerial slash and burn on the flimsiest of pretexts is unlikely to be the last. 

But all that said its time to move on (a conclusion also reached last week by UKFC CEO John Woodward) and do what we can to ensure that what emerges from the ashes of the Film Council does justice to the talent and aspiration of UK filmmakers and to the needs and desires of audiences here and around the world.  Pity we seem to have to keep reinventing the wheel though…

Let’s not pit TV against film

A couple of years back in a contribution to the book Scottish Cinema Now I wrote

Over the past twenty-five years filmmakers in Scotland have benefited from a protected support system which has privileged their claims to both cultural subsidy and direct financial investment in screen content. That situation is changing rapidly, as television, games and new media producers demand equal status in the subsidy game, basing their claims on economic, cultural and democratic grounds.

Today’s Sunday Herald article on television in Scotland highlights the sector’s growing case for greater public investment to underwrite the domestic production sector’s capacity to secure a greater share of network commissions.  The BBC is the key objective, as it rolls out its promise to up Scotland’s share of network spend, but Channel 4 and, to a lesser extent, ITV are additional prizes on the horizon.

The suggestion that film in Scotland has enjoyed a ‘privileged’ status akin (STV’s Alan Clements is quoted as saying) to ‘snobbery’ in the eyes of Creative Scotland’s predecessor Scottish Screen echoes the comments made in evidence to the Scottish Broadcasting Commission in 2007 by PACT CEO John McVay “The obsession with film was a big mistake. “ and well as former Scottish Enterprise CEO Jack Perry who claimed films supported by the Glasgow Film Fund had ‘negative value to the economy’.

Now public investment in talent, skills (both creative and business), development resources, infrastructure and professional support services are all perfectly legitimate claims for any industry – creative or otherwise – to make on the public purse but in a period of swingeing cuts to public sector spending its even more vital that legitimate and important conditions are met by any investment regime.

Firstly public funding mustn’t be used to substitute for or ‘crowd out’ rather than ‘crowd in’ investment that could (and indeed should in the case of public service broadcasters) be made by the central industry players in the market. Where public funds leverage new additional investment either from end-users (broadcasters, distributors etc) or from private finance that’s undoubtedly a good thing. There is certainly a case for additional investment in the development capacity of independent producers but if this simply leads to a transfer of risk e.g. from broadcasters to public funds without a significant net increase in overall investment nothing will really been achieved. 

Secondly we need to be careful that public funds raised and designated for one purpose e.g. Lottery Funding explicitly designated to support ‘The Arts’, amongst other ‘good causes’, are not used to substitute for the lack of appropriate and necessary investment from other branches of Government. 

The perfectly legitimate case for pump-priming investment in television production companies producing revenue generating, employment creating, profit-maximising product in a context where they have been at a historical and structural disadvantage in the market place shouldn’t be confused with mechanisms to address a wider cultural, social and industrial deficit in the production, distribution and appreciation of indigenous screen content.  They are, of course, intimately intertwined but they remain separate policy objectives in need of co-ordinated but nonetheless in some respects distinct forms and criteria of intervention.

Thirdly we need to be wary of what economists call ‘regulatory capture’ – “the process by whereby beneficiaries of government decisions gain control over the relevant decision-making machinery.” – a charge usually leveled at cultural rather than economic players (see David Throsby, 2010. The Economics of Cultural Policy,  Cambridge University Press).  

Consultation, participation in deliberation, expert advice and opinion are all vital to the formation of policy but we always have to ask if any one interest group is exercising undue prominence or obscuring the wider picture and if the evidence, analyses and option appraisals they offer up are as objective and robust as the public have a legitimate right to expect when scarce public funds are at stake. 

As the Sunday Herald article rightly notes, there is in prospect a much more joined up approach to growing the economic (and indeed the cultural and democratic) contribution of television in Scotland. Likewise the television production sector has an absolutely legitimate place in the debate over public intervention in the screen sector, but so do filmmakers, the audience(s) and a host of interests from Gaelic speakers to community cinemas.  That said we need  to avoid setting television (or games or any other screen based creative content) against cinema and confusing the criteria by which each has a claim on public support. 

As I suggested in that Scottish Cinema Now essay, some in the film community were a little too eager in the 1990s to obscure the cultural case for film in order to make somewhat inflated claims for the (currently achievable) economic impact of indigenous production.  By the same token those now pressing, quite understandably, for a more serious approach to growing the broadcast sector shouldn’t see film as a competitor for attention and funds.  In reality television drama for example (a must for the long term health of television in Scotland) and film-making for the cinema are mutually inter-dependent.  Amongst their shared interests both rely on the same talent base from writers and directors (look at Paul McQuigan) to post-production SFX specialists and commissioners (think Andrea Calderwood) and there are important synergies to be found at a business level as a recent report on the corporate finance of SMEs in the UK film industry for the UK Film Council found.

When it comes to film and television, as in so many other walks of life, united we stand, divided we fall.

Number crunchers at (the) stake

One of the many good things at risk if the UKFC does get sacrificed on the Coalition Government’s QUANGO bonfire is its Research and Statistics Unit (RSU). They have done all of us with a professional interest in film a huge service over the past few years by producing a steady stream of  research both wide and deep.  One of the many questions to be answered by the DCMS and Jeremy Hunt is whether, and if so by whom, this vital if unglamorous part of the UKFC’s work will be carried on.

Delving into the RSU’s latest annual yearbook of film facts, as always there is a wealth of important and revealing data to be found, albeit too little of it disaggregated to provide the Scottish dimension.  Amongst the sections which are, we find that Scots in the central belt continue to go to the cinema more than anywhere else in the UK with 3.5 admissions annually per person compared to the UK average of 2.8 per year which happens to be exactly the frequency at which Northern Scots take in a movie.

Scottish movie taste appears to be more diverse than most of the UK apart with over 5 ‘specialised’ screens per million of population compared to the UK average of 4.  Only London, perhaps not that surprisingly, has more at 10 per million.

One of the more obscure facts buried in the yearbook but none the less still interesting is a comparison of the top movies on free-to-air and subscription channels.  ITV2 clocked up 5.8m viewers for Ice Age 2 while Sky Movies scored 5.3m for National Treasure: Book of Secrets.  The interesting bit is that whereas Ice Age was screened just 5 times on the free channel, garnering an average audience of just over a million, Sky had to press the playout button on National Treasure no less than 184 times for an average audience per transmission of around 30,000.  Two very different patterns of viewing it would seem to get roughly the same number of eyeballs.

A related but much less obscure fact is that contrary to expectations UK pay-movie channels have experienced a decline in audience over the past nine years from 647 million views in 2000 to 559 million last year.  Though over that period the total audience for movies on TV rose above then fell below its 2000 level of 3.5million viewers, it has more or less recovered, mainly thanks to Freeview (with the help of those Artic critters and their friends) to stand at 3.4 million.

What matters most about these numbers is that movies generate a substantial part of the broadcasters’ audience and thus revenue, which the UKFC estimate at around £1.1 billion a year of which around 20% – £200m – are UK films.  Although the majority of these are US backed UK films such as Charlie and the Chocolate Factory or Love Actually, there remains an important argument that whether free-to-air public service, licence fee based, advertising or subscription-based, UK broadcasters should be investing more of their revenue in UK production, both on cultural grounds for those with serious ‘public value’ intent (i.e. the BBC) and/or as part of their self-interest in ensuring the continued existence of a UK film industry that can continue to supply film content for their audiences i.e. us.  UK Broadcasters currently invest only about £25m in film production, low compared to other European countries.

These are just a few, almost random, bits of data from the over 200 pages of the 2010 yearbook, a taste of the crucial research that the RSU undertake, collate and analyse so that serious discussion of the film industry is possible and we are not reduced to exchanging anecdotes and guess-work about what’s really going on.  Or as one sage put it:

“Where facts are few, experts are many.”

Those PACT proposals – good for whose business?

Yesterday’s ‘Something for Nothing’ Edinburgh International Film Festival discussion on PACT’s proposal for a new deal between public funders and film producers proved to be quite a lively affair.  Having raised the specific issue of how the proposals might impact on Scottish production (see earlier post) I was invited to be on the panel and contribute to the wider discussion.  Having given them a bit more thought it seems to me that PACT needs to address, and the public agencies need to consider carefully, some key questions and consider a number of safeguards should they take them forward.  There are some other issues, principally of methodology and the evidence required to back up the assertions around cause and effect, much of which could be addressed through some econometric modelling of the proposals, but we’ll leave those for now.  But for new readers let’s briefly recap the key ‘problem and solution’ posed:

a. In essence PACT’s view (and few could disagree with this first point) is that UK film businesses are underperforming – they are under capitalised, too few have any scale and even of those that do there are major obstacles to sustaining their businesses.  PACT also holds that this is not because of any deficiency in the product:  “UK Independent producers consistently make films that work with audiences and critics alike, yet the current business model prevents them being able to benefit.” 

b. PACT believes that a major contributory factor to the above state of affairs is that public film financiers such as the UK film council, Scottish Screen and the regional screen agencies treat their investment in film production as equity and expect to recoup their investment before the producer (albeit many now allow a recoupment corridor e.g. the UKFC’s recently agreed 30%).

c. PACT proposes, therefore, that henceforth public funding should be treated as the producer’s equity and that this would produce the following benefits:

1. producer’s would have increased leverage when seeking private sector finance as they would be seen as investing their own equity

2. production companies profitability would improve as a consequence of being able to secure more finance, on more advantageous terms, added to the direct benefit of being able to reinvest the recoupment revenue stream (of what would now be their equity) ensuring better financed development, less ‘rush to go into production’, the prospect of increased budgets and following those better results in theatrical and other markets.  In short a virtuous circle in which everyone would benefit because:

3. More succesful film companies would become progressively less reliant on public funding as they would increasingly be able to source finance elsewhere and this would in turn allow smaller/newer producers to get an increased share of the public funds thus ensuring that their (other principal) purpose – ensuring a culturally diverse, risk-friendly film financing environment – is not just maintained but enhanced, thus ensuring better public value all round.

It all sounds terribly good but there are one or two catches.  One of them I’ve already raised, the problem of national/regional funders seeing the recoupment stream (small as it is) leak out of their nation/region .  Though its worth noting here as a reminder that out of the £5m in Lottery awards Scottish Screen (soon to be Creative Scotland) made in 2007, 55% (£1.9m) went to London-based companies and while they might well, under the suggested new rules, be inclined to reinvest revenues returned by virtue of their (publicly donated) equity in Scottish talent/projects, without some safeguards in place there is no guarantee that would happen.

An even bigger issue, however, is the credibility of the idea that over time the call on public funds from the growing, more profitable, production companies would decrease.  At present, taking PACTs own argument at face value, there is a significant disincentive to better-capitalised, more market friendly companies seeking UKFC or Scottish Screen investment precisely because it is likely to dilute their equity position and reduce overall revenues.  Take away that barrier and it is difficult to see why any rational film business wouldn’t try to get as much public money into their projects as possible since in effect it would become a grant and increase their equity to boot.

On this point several panelists suggested that since the public bodies have the right to choose which projects to invest in they could choose not to invest in projects whose producers might only be trying to ‘milk’ the system.  However to do so there would need to be a criterion for determining which projects were ‘genuine’ and which were trying it on and that is by no means simple.  Almost any producer worth their salt could make a pretty convincing argument on the basis of employment, multiplier effects, sustaining UK production infrastructure etc. plus a modicum of ‘cultural relevance’ to argue their case to access the public cash. 

While these are legitimate arguments for certain kinds of public intervention, there remains a very real risk that a significant amount of public funding could end up substituting for, rather than additional to, market investment and thus not in fact delivering any of the public value it is intended to.

 There are, then, quite a few issues that PACT and others need to address and on a positive note the indications from yesterday’s event are that at least some of them will be taken forward.  In reality I suspect PACT don’t expect to get a complete transfer of equity from the public funders and the report is the first salvo in a negotiating strategy which is looking to gain at least 50% of revenues.  Unlike the effective and well-deserved reversion of TV rights from broadcasters (who unlike the UKFC or Scottish Screen etc. are end-users and get their/our public value from the licence to distribute ) to indies, the position of public film funds in the current climate makes any dimunition of their meagre resources a tough sell.

Knowledge resistance unmasked

My former research supervisor Prof. Philip Schlesinger scores another direct hit with his observations on resistance to evidence by policy makers, judging by his lecture remarks reported recently in the Times Higher Education Supplement.  His comments on how Creative Scotland’s board was apparently disinclined to accept his team’s analysis of the tensions inherent between the culture/industry value systems echo that wonderful, pithy remark of John Maynard Keynes:

“There is nothing a government hates more than to be well informed; for it makes the process of arriving at decisions much more complicated and difficult.”

The evidence base for Scottish cultural/creative industries policy is, to say the least, impoverished and the role of disinterested analysis of how policy is formulated and applied (not the same thing!) and whether it produces the intended outcomes (or indeed if the outcomes we get are a result of policies or despite them) is poorly understood and valued even less.  You will find scant evidence thus far of a commitment to engaging with policy research expertise in Creative Scotland’s plans or pronouncements, nor in the advisory groups/board composition.  Expect a continuous flow of convenient consultants’ reports saying what is expected of them and finding out that ‘by gosh, overall everything we do does what we thought it would and all is right with the world – keep up the good work’.

Well perhaps that’s a little jaundiced – let’s give CS the benefit of the doubt and look forward with anticipation to a healthy and long overdue engagement with the idea of evidence-based policy which, while now almost old hat in many sectors, is very much a new kid on the block when it comes to Scotland’s cultural and creative industries NDPBs.  So lets end on a more positive note with another Kenyes quote:

“It would not be foolish to contemplate the possibility of a far greater progress still.”


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