Film Diversity Action Group Response to Labour Party Consultation: Diversity, Inclusion, and the Film and High-end TV Tax Reliefs

Further to the invitation to submit evidence to the consultation issued by Tom Watson MP, I am pleased to attach a draft paper on this subject prepared by the Film Diversity Action Group (FDAG), of which I am chair. FDAG is an ad hoc group of veteran film and television professionals who have campaigned for greater diversity in film and television in the UK over a period of years.

I have included your questions in italics.

Is the tax relief an appropriate vehicle for promoting diverse and inclusive representation? 

We believe that the film and high-end television tax relief is not only an appropriate vehicle for promoting diverse and inclusive representation but it is the only such vehicle, short of legal compulsion, that is likely to deliver the desired results. We say this based on our experience; in particular, having taken leading roles in the British Screen Advisory Council Committee for Ethnic Minority Employment in Film, which was established in May 2000 at the request of Chris Smith, Secretary of State for Culture, Media and Sport. The report of that committee contained a number of eminently practical, voluntary proposals none of which have been acted upon by the industry. As regards diversity and inclusion, the industry languishes exactly where it was 19 years ago.

Our conclusion is that, in the absence of incentives or sanctions, purely voluntary arrangements, even when promulgated and widely supported by the industry itself, don’t work.

How should diversity and representation categories be incorporated into the tax credit? 

Should there be a Diversity Test alongside the existing British Cultural Test to qualify for the tax reliefs? 

How should the system of weighting work?

What weight should any new test have compared to the existing elements? 

 The tax relief was designed to stimulate greater production activity in the UK. In this it has been very successful. Naturally, it comes with conditions attached: first, passing a threshold as to the form and purpose of the production and, second, meeting the minimum requirements of the “cultural test”. More work needs to be done to decide where diversity and inclusion criteria might fit within, alongside or between these two conditions, especially if, as we propose, the tax relief is bi-furcated so that a producer can choose whether or not to go down the diversity route.

We are aware of the problems associated with making diversity criteria either part of the threshold requirements (possibly necessitating primary legislation) or part of the cultural test (running the risk of a “pick-and-mix” approach that allows producers to choose between forms of diversity, which we regard as invidious). We believe the solution to these problems is a technical exercise requiring expert advice.

You will see from the attached paper that our proposal is a mix of carrot and stick. The carrot is an increase in the tax credit for meeting diversity criteria, on an upward ratchet as the criteria themselves move from lower to higher thresholds; the stick, introduced over a period of time, is a reduction in the existing tax credit for failing to meet those criteria. The producer can choose which route to go down. There are other proposals out there and we welcome them all as providing a basis for discussion.

Are there any other examples of where promoting diversity and inclusion has been made a requirement of funding?  

We note that state legislatures in Illinois and California have introduced diversity as part of the eligibility criteria for tax breaks and that New York has given the matter consideration.

Should the Diversity test be based on the existing BFI Diversity Standards?

We do not believe that any such diversity test or threshold should be based on the existing BFI diversity standards.  To meet the standards a film has to address only two out of four criteria: on-screen representation, themes and narratives; project leadership and creative practitioners; industry access and opportunities; and opportunities for diversity in audience development. In practice, the last two criteria could be met by providing work experience and investing in marketing that is targeted at diverse audiences. Furthermore, the criteria can also be met by focusing on just one group out of six: disability, gender, race, age, sexual orientation or lower economic status. In other words, a film could comply with the standards without employing, say, a single BAME or disabled practitioner. In our view, this is not good enough.

Should the system be based on self-reporting? If so, is there an existing model that could be used or developed? 

 Whichever system is adopted is likely to be based on self-reporting. This is a matter of practicality. Producers should be held responsible for the accuracy of diversity data included in the audited cost statements submitted for the purposes of certification. These could be backed up by spot checks carried out by the BFI, which we would expect to be the administrator of the scheme. There is guidance in this regard from the Equality and Human Rights Commission’s Code of Practice on Employment and the BFI itself has a standard form that includes all relevant legal and consent requirements for the collation and use of such data.

The guilds and unions, which should be consulted on this and other issues, might have other procedures in mind.

Which elements of production will count?  

 We envisage that all UK expenditure, as itemised in the audited cost statement submitted for certification, would be included for the purpose of arriving at a head count of the production, with the exception of the costs of finance, the management overhead charge and other line items not directly related to pre-production, production or post-production. We do not envisage that agreement on what is included and what is excluded will be a controversial matter.

Should there be specific targets for in front of and behind the camera? 

Our aim would be to achieve an overall diversity and inclusion target initially, expressed as a simple percentage of all those employed on the production. But over a period of time we would want to see the achievement of agreed targets in each department below the line. Only in this way can we secure a fundamental change in the culture of the industry.

How much flexibility should there be across categories for how the threshold is met? 

There would, of course, be permitted exceptions to any such scheme, mostly to do with the milieu in which a project is set and/or its specific location. In our view, such exceptions would be within the discretion of the administering body, provided that the reasons are published in an agreed form and in timely fashion, so that they can be subject to scrutiny.

If you have any questions arising from this letter or the attached proposal, please don’t hesitate to get back to me.

Yours sincerely,

Terry Ilott

Chair, Film Diversity Action Group

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