 Good morning and welcome to the 10th meeting in 2018 of the Culture, Tourism, Europe and External Relations Committee. I would like to remind members and the public to turn off mobile phones and any members using electronic devices to access committee papers should please ensure that they are turned to silence. Apologies have been received from Jackson Carlaw, MSP and Mary Gougeon MSP this morning. Our first item of business today is the fifth evidence session in our inquiry into Scotland's screen sector, which today will focus on finance, investment and support. We will hear from two panels today. I would like to welcome our first panel of witnesses, Sajid Qayam, head of production at Caledonian TV, Annie Griffin, creative director with pirate production, Nesum Ali Kero, producer with Blazing Griffin, Lauren Boswell, the Scotland organiser with equity and Grant McPhee of tartan features. Welcome and thank you for coming to speak to us today. This section is focusing on funding and support. Our inquiry generally is focused on the screen sector leadership group's recommendations and whether they are being enacted and what needs to be done to make sure that they happen. One of the screen sector leadership group's criticism of public funding for screen was that it was very fragmented. I wonder whether you could reflect on that in terms of your own experience and where you would like to see it change. I do not know who would like to go first. I can jump in. Do you mean fragmented in terms of where we get support from? Blazing Griffin, we are a film production company. We also do video games and we have film and post production as a service as well. We get support from Scottish Enterprise, Creative Scotland for production and development and also from SDI for when we look to increase our ability to sell internationally, attend markets and things like that. Where we get support from is fragmented. We have learned over the last three years how, for us, best to access each of those different places, we have an advantage over others in our industry. We operate in a broad range of sectors. We slightly did that by design because in order to become investable as a company it just so happened that it also makes you supportable by the public sector. That is what I would say. Although fragmentation has not hindered us at all, I can see how our fellow producers hindrance because it takes a lot of capacity to have all those relationships to figure out all the different ways that you should be presenting yourself, the way that you present yourself for equity investment in your company as a whole is completely different from the way that you present your package of intellectual property for development support. If you are a two-to-five person company, that is a huge burden. To be clear, we probably would not have had any Scottish Enterprise support if we were only a film company. We do not specifically get support for film-related activities from Scottish Enterprise, which has not been a problem for us, but it is because we have worked around it rather than because it is directly supposed to be that way. Nathan is the exception, and congratulations for getting support out of Scottish Enterprise. It is brilliant that there is a company that has harnessed film and TV making with the games industry. I am sure that you have heard this before, and congratulations on educating yourself so much about our industry. For the whole thing, it is so great to know that you are interested in our industry and want to support our industry and see the potential for our industry. I have lived in Scotland for 20 years, and it has been very tough. When my company, prior to 20 years ago, was based in London, it is always hard to pitch and development whether you go to pilot or go to series. That is a long process, getting television projects commissioned. Every company needs a kind of thing that they do to keep going. At the time, we did interstitials for MTV Europe. If there was ever a period of nothing getting development money, we got a title sequence or short films from MTV Europe or other networks like that. Since I have moved to Scotland, there has not been that possibility. My company has tried to make things for children's television. We do not have any experience of video games or a business model that would look more acceptable to what Scottish Enterprise wants to see. We have received slate funding from Creative Scotland, which has been very appreciated. I think that the overall problem historically in Scotland is that you have Scottish Green and Creative Scotland investing development funding, but if there is nowhere to go, it is the worst position to be in that you develop something and then it gets not backed by the network. My company specialises in TV. We have done feature film, but for television to constantly be knocked back. That is why we will get to talking about it. The new network is the most important thing that has come out of this process and potentially the best possibility for us. At the moment, I am working on a show in London, which is for a new network and for RTE. I was saying to Nathan before we came in. Within two weeks of pre-production in London, I have probably run into ten decision-making executives that I have not seen in a year. I am in London because I am in the middle of it. That is not having decision makers in Scotland in terms of getting things green-lit is the worst problem for us. Unless we get joined up between Creative Scotland and the potential of a new network, it will continue to be a problem. From our perspective from Caledonia TV, predominantly we are a factual non-scripted documentary and drama doc company. Again, it is entirely different, although I tend to agree with Annie in general that funding is very rare in our cases and in the programmes that we work across. Anything that we want to push towards development comes from existing production budgets. Whilst we accept that television is perhaps seen to be more, get a garnish that is won money, there are instances in the past where certain production funds from Scotland have worked for us. We have been around for 25 years now. We would have to go back to about 17 or 18 years ago before we received any funding. There is a particular pot funding that we received from a Scottish enterprise at the time, which really helped us in our development and helped to grow the company exponentially. There have been funds in the past that have worked in our industry, particularly in television, but now we are finding that those pots are no longer there. The products that are on offer from Scottish enterprise and others are not really relevant to us in our industry. The worry with going forward here is that the focus tends to be primarily on drama and scripted, which is important for a growing industry. For example, Cretive Scotland right now only has lottery funding and therefore there is no way of us approaching any funding for that. Even at the highest end of a drama documentary, we are talking about half a million per hour, which has issues with tax and so on. It is not so much that it is fragmented, but it is non-existent from the television industry right now. I note that Sachi Dyn Caledonian TV's written evidence. You make that point, but you also make the point that you believe that Northern Ireland's screen is far more sympathetic to factual programming. We went on a fact-finding visit to Northern Ireland when we met Northern Ireland's screen and a factual independent production company, which were very complimentary about the support that they got from Northern Ireland's screen. Absolutely. Co-production is another area that we would like to focus on here, which I want to bring to the table here because there is not a lot of factual companies in Scotland that do it, but it is a big area. We have realised through the years that in terms of the diversity of the places that you go to, going to network commissions, etc., is becoming more and more very competitive, especially than other startups that are happening now. We have looked at international co-production. We have had success in Australia, in Germany and in recently more in Ireland than even Northern Ireland. The companies that we have come across in Ireland as well as Northern Ireland, even when we have brought IP to the table, it has been our idea because of the lack of funding here. The only source of funding here for non-script, or even a drama documentary, has been from the broadcaster itself, from BBC Scotland. There isn't any other opportunity to bring in money, whereas in Ireland, for example, they have the BAI, which gives quite a lot of funding. Northern Ireland is the same. On top of that, there has been a huge slice from the tax relief system. In the end, when we have done co-production, we have had to give over not only our IP but the production has been done in Ireland with Irish staff and Irish crew. On top of that, when you come to the back end, if there is anything to be made in the back end, because you have brought very little to the table in the first place, you get a smaller slice from that, so on-going revenue is limited as well. Lauren Grant, do you want to come in on the general question about funding before we move on? For me, tartan features are a collective of individuals, so I am only going to be speaking individually for the films that I have made through that. Our levels of funding are exceptionally low. They can be between £1,000 and £100,000. The problem that I have been facing with funding is that, because our levels are so small, we have been able to create the films ourselves, but it is actually getting the funding from Creative Scotland. Two films have received funding after they were completed for 99 per cent completed, and I could only access that funding through a producer who is incredibly helpful towards the film. The film eventually was screened in BBC, and it has won awards at festivals, but I know—I can at least say that I am very certain that I would not have been able to access that funding that we needed to get the film to the extra level that it needed without that help. To me, there are many, many people in the industry needing that funding, who have the talent, who have created the films, who have the problem, which I had. It was really the forms that you have through Creative Scotland, and that is a problem for me, and I think that it is a problem for other people as well. I really wanted to probe a bit further on the screen unit. I am interested in the comments panel that have made around funding, either being difficult and quite bureaucratic to access or not being focused in the areas where you feel funding should be. First of all, do you feel that you have knowledge and you have been kept informed of the progress of the screen unit? Do you feel that you have any influence and the points that you are raising today are being heard by Creative Scotland on the creation of the screen unit? Several of us, Nason and I and Arabella, who are going to speak later, are on IPS. IPS have lobbied for the screen unit and IPS are trying to input into the discussion. We think that it is very important that we have input into that. It has been real progress that the production sector has come together to thrash out our differences and to speak with one voice over the last three, four years. We are very excited that there is going to be, we are talking about the upcoming screen unit. We are very excited that it is going to be happening and we are meeting today to talk about our input into plans for that. Broadly, I am, again, only from the blazinger from perspective, very happy with the way things have progressed over the past two years, with the way Creative Scotland has maneuvered within its own constraints to provide flexible support. Having listened to the industry and the proposal that is on the table at the high level, it answers almost all of the points that we have raised over the past many years. The question in terms of implementation is in the detail. The screen unit can do that in lots of different ways. It could be done in ways that, for example, completely ignore the micro-budget feature segment of our industry, which I personally think would be a big issue. I think that it is one area where public funding can be used effectively to grow the market and the industry in Scotland. It could be used in a way that supports inward investment to a degree that crowds out domestic producers from the local labour market, or it could be done in a way that supports indigenous producers effectively and allows us to retain our intellectual property, which is where value will be for all of us in retaining intellectual property. I think that it is a very long-winded way of saying that the intention seems great. The proof will be in the pudding. We are a part of the conversation, but it needs real detail. It is a competitive market. There was a meeting a few weeks ago, a consultation about one of the funds that there is going to be getting input on it. One of the producers there made the point that it has become a very competitive market for high-end drama, for example. I think that the funds that are set up need to be in recognition of that. Historically, Scottish Green and Creative Scotland have been keen to have their money paid back first. What we want is people to say, let's co-produce with you and do it in Scotland, because you have the advantages of the funds from Creative Scotland, of these tax breaks, of these things. We have not had that since the demise of Scottish Green. Is it then fair to say that, while the screen unit has been announced and the first of April was a date that had been established or now passed that day, it is still fairly at implementation stage, that while you are clear on what it is that you would like to see it do, nobody at this stage knows where it will do. As you say, there is a high level. In principle, when it comes to the decisions on what type of funding is going to be available and to its target stat, we don't even know how much funding is. We do know what the pot is and I think that they are establishing the parameters of the funds at the moment, I believe. We have been quite well informed in that, from the television perspective, Caledonia sits on a TV working group, which members of Creative Scotland have sat on etc. We have probably more access to shaping what the screen leadership group becomes. There are only four or five independent companies that sit on that, and there are about 40-43 companies in Scotland that are at least the members of our trade industry packed. There will be a number of companies out there that will not have been able to get that same access. They have expressed that they want to develop the whole area of television in a way that Creative Scotland could not do in the past. However, I am a little bit concerned in reading a little bit into the reports that have come out. In some of the summary documents that TV does not seem to be getting much of a priority, although we have been told that they will have a separate group. It requires a specialised group within there to look at the whole area of television, which, if you look at Scottish terms, is one of the biggest revenue providers in Scotland. The biggest companies in Scotland, which are 10 million plus, are predominantly in that field, so it is extremely important for them to look at that. However, it is a bit worrying that time marches on, and nothing specific has been established. I have not heard anything more recently, but certain initial stages have been set up. They were independent television producers that sat on the committee to guide them, so we are quite happy from that perspective that we had quite a wide variety of members' focus and discussion. I read a 60-page report, and I know as much as I did before that I did after reading a couple of newspaper articles. On the point of implementation, it is easy to look negatively at how change has been slow. We have had recommendations over a year ago, and the screening has been created. On the flipside, there is so much learning to do as to how to best support. We call it the film and TV industry, but it is a whole bunch of different industries and different markets that all need different types of support. None of us here need the same products. I guess that I principally do not have a problem with things taking time. If it looks like the consultation, the discovery, the experimentation even, which I realise is hard to do with public money, it is hard to go, oh, well, we are just going to see how, if we put a little bit of money here, maybe we will see what it does and then try something different fairly rapidly. I guess that I would not take the length of time that it takes to implement, necessarily as a negative, provided what is going on underneath the surface is data-led, responsive and tailored across all of our complex markets. We did have that last week, but the last session that we had, there was a bit of a discussion around the role of the state and of the public in what is a commercial and competitive environment. As some of the comments that you made suggest, will the screen unit or can the public sector, there needs to be risk taken within this sector, are we able to do that with public money? That is the environment that the film and TV sector seems to be working in. It is a competitive environment, and it is how those two merge. I know that other members will raise questions around Scottish Enterprise, where the enterprise business side sits, but the creative side still sits with Creative Scotland. Will the screen unit successfully bring those two together and be flexible enough to meet the needs of the sector? I think that we all keep talking. That is the problem. When you have people going off and devising the structure of the new screen unit and how much the jobs will be available without having input from the industry about what we need, which is why this is so great and important and why we are meeting and why the IPS is continuing to try to give input to the new screen unit, I would rather that it took the time to get it right as well. Daniel Hamilton and Tavish Scott both wanted to commend us on the points that have been made. It is on many points that have been made regarding Scottish Enterprise, if that is okay. From the evidence that we have been gathering from various evidence panels, Scottish Enterprise has come up numerous times. It seems that most of you know more than Scottish Enterprise and can tell them how to take forward a proposal. There seems to be a lack of experience and expertise within Scottish Enterprise. I wanted to discuss how you feel that Scottish Enterprise can take forward the recommendations by the SSLG to support the screen sector. I would like you to include other aspects such as data collection and the other aspects such as the criteria that set particularly the turnover, the high turnover of the companies that Scottish Enterprise currently expects over £10 million, which only STV and IWC can meet. It is just an open discussion of how we can meet the recommendations for the SSLG. I have the most experience working with Scottish Enterprise. What the SSLG recommended is right, that working in partnership with Crate Scotland and the other supporting bodies in Scotland is probably the only way that it can work. To a certain extent, television companies, but to a much lesser extent, can't get to the place of critical mass of the capacity of access to capital that makes it traditionally supported by Scottish Enterprise. We received support from them well before we hit 10 million turnovers sadly next year, but they helped us with the seed investment rounds. They co-invested prior to that. They were helping with development and training. They co-invested on a series A round and have supported us through that entire process in lots of different ways as well. For me, it is a question of, if we are the exception, why is that? How can we learn from one data point? I am not sure if we are the single exception, but regardless it will be a few points of data. For me, the question is really in building capacity. How can Scottish Enterprise, in potential remit to create a sustainable industry and market in Scotland with companies that are self-sustaining and don't have to continually rely on subsidy? What does it take to get there? It is a raft of different things. A huge part of it is capacity building. What does it mean to talk to investors about different ways of investing in your company or in your product? That is just knowledge. It doesn't need money. It is money in terms of time and training, but it is not more than that. Having a lower level to be able to access that kind of funding and that kind of support is really important. I cannot see in the current system and not knowing enough of the detail about the intentions going forward how Scottish Enterprise could more directly invest in more film and TV companies given that they really need to be investable propositions. The question is how we get there. Working with Creative Scotland, whose key remit is in... It is not creative, but it is in intellectual property. That is what our assets are. The focus is how do we build intellectual property, how do we build it so that the profits are flowing back to the companies? The valuation of this company is X. There is the creative and film-specific aspect to that, which is Creative Scotland's expertise. There are a lot of different ways that it can support at the different stages, the different types of market failure that we have in Scotland. Working in conjunction with Scottish Enterprise to go at the same time, we are building the business capacity to then be able to take that to the point where it is either investable or at least proves that there is sustainable growth. Just on that point, I noticed that the PAC study had suggested that Scottish Enterprise had supported 100 businesses of which 50 per cent had actually failed. There is clearly something that is not right there and you use the word sustainable. I am not quite sure what you mean by capacity in the sense that are you saying that you want Scottish Enterprise to actually create or find the potential opportunities? Do you think that you can get funding to take that through with international cooperation? I personally do not look at the role of the state to find opportunities for us. That is our job as the private sector. The way I look at it is that if because of the status of the international market, our lack of competitiveness with it, or at least our lack of ability to get to critical mass to be able to compete internationally, what that means is looking at the real specifics of what it takes to do that. In the film world, that can be creative development of projects to an international standard. That is having the skills and ability to really make sure that you are developing television shows and films and all of that that are going to be able to compete internationally. That is just raw skills that can be learned and developed over time. If we do not have it individually, we need to look at ways of bringing in those skills and then disseminating them. It can also be for us how you make productions efficient so that I can physically be able to do two productions a year, because that is what I as a film company need to be able to do to become sustainable and have built enough of a backlog of intellectual property that I can know that that income is going to see me through times when there are market shocks. I think I'm running out of time, so I would just want to hear from some of the other panellists. I can't teach Scottish Enterprise how to support my industry when I'm very focused on keeping going as a production company. In the early days we did get support from Scottish Enterprise. Our experience, and I'm sure you've heard it, is that the eyes light up when you see video games and stuff from Scottish Enterprise. They really have found it hard to understand the nature of our industry, the hit or miss agency. I am, as a production company, very focused on trying to get the projects underway rather than figuring out how Scottish Enterprise can support them, because we have, by and large, given up on them for support. From the TV perspective, again, the lifeblood of any television company is development and developing a lot of ideas at a time and keeping those relationship with commission editors. In the past, our production budgets from television have been high enough that we've been able to sustain a small team of development people, three to four people. That's no longer the case. Production budgets are constantly being slashed right down and down to the point now where we can barely afford one person in development in our team and the rest of us trying to pitch in whenever we can. For support in that area, it's extremely important. Our point is that it has happened in the past. We mentioned it in our submission that there was a scheme called the Creative Industries Development programme early 2000s in which we received money. It was match funding towards getting a development individual who happened to be based in London. Again, the flexibility of being able to do that was really useful. Our turnaround was trebled within 18 months to over a million. We were able to work across network productions that allowed our staff to go down to London and work on formatted and featured programming for them to get experience in that and develop in a way that wouldn't be possible. By the way, the Scottish crew did a lot better than the London freelancers. That kind of system worked for us in the past and we would like to see something of that nature being introduced again because we think that it can be a benefit television production company. There is also a co-investment fund that Scottish Green invested in a documentary. Again, we are talking about lower ends. We are talking about 150,000 per hour approximately and invested in a specific production with investment from the broadcasted ITV and investment also from an angel investor in London. That production has become one of our biggest selling international productions around the world because of the nature of the documentary. Those funds have helped in the past. By talking about early 2000s that were around, they are no longer there. That is one aspect that we would like to see being brought back in again and looking at the past and seeing how those things have been successful for Scottish indie companies. The other aspect is the whole aspect of inward investment of production companies in Scotland. That is where we find a disadvantage in that if there are companies that are from England who already have quite a lot of backing in the first place, come into Scotland they can get quite large grants to helping them towards, which is fine, but it is not a level playing field. If we were to try and get similar investment, it wouldn't be there because we are already in Scotland. From the back of that, it is not an issue. It is great to get more companies that will provide more jobs. There have been companies that have been very good at that. Sadly, it is very few. I think that a lot of them have set up, have either collapsed or gone by the wayside or have not really established the Scottish base properly. I would like to see more data analysis of how that investment funding has benefited Scotland and Scottish crew and Scottish people, because I talk to people a lot in the crewing sector in the finance industry. It doesn't seem as if a lot of work is coming away from those type of companies. There is very little evidence that Scottish Enterprise is a willing participant in the industry. I don't think that they like it. I don't think that they like the speed that it works at. I don't think that they like the business model. I think that there is a case for really reviewing their involvement in it. The screen unit continues to give Scottish Enterprise a role in developing larger companies. I take it from what you are saying that that is probably not a very good idea. It is not really my level or my area of expertise, but there is just no evidence of interest. Scottish Enterprise focuses on specific industries with specific outcomes. This industry operates in a completely different way. It is so project-based. I think that what you heard is that people are looking for two projects a year to keep them going. It just doesn't compute with Scottish Enterprise. I think that they are like a fish out of water. I certainly already experienced being a smaller company. We are near the £10 million threshold, let alone the £5 million. We have not been accounts managed by Scottish Enterprise for some time now because we are way under the threshold. By far, the majority of companies in Scotland are nowhere near that threshold. Therefore, to focus on growing companies to be above £10 million, which is good, that's fine, but there should also be a focus on growing smaller companies to a lesser degree, companies of less than a million, up to £5 million, etc. Given that I can only go by our lobbying group pact, we have 43 members in Scotland and as only two members are above £10 million, both have either broadcasted behind them or have a huge international company behind them in the case of IWC. We think that that is not necessarily the most balanced way forward. I'm afraid that we've only got 20 minutes left and we've got several other members who want to come in. I could ask questions and answers to be as brief as possible to have you, Scott. The logic of the arguments that you've made this morning about funding surely is that we have a one-stop shop and that is Scottish Screen. Isn't that what you're really arguing? I can't see the logic of Scottish Enterprise being involved at all. Should we not be arguing, take the funding pot away from Scottish Enterprise, give it to the new organisation and make sure that organisation is properly staffed and properly resourced? The second question is in some earlier evidence that we got in this committee in terms of the board of the new Scottish screen. It was suggested that your industry across the different areas that you've described this morning should be represented, probably on a rotating basis. We should take clever people that are in your industry, put them on the board for three years, make them make decisions and then get them back out into the private sector. We're all clever. I don't doubt it for a minute. Would you accept that model because of the industry's need to be in charge of the future? Yes, although it takes a bit of time to make any impact on a board, not every year. I absolutely think that we should be on the board. The independent production sector should be on the board. Would that work for television as well? Absolutely. Richard Lochhead, it's been asked. The convener and Tavish Scott basically covered the points that I was going to raise. I will just maybe elaborate the point that Tavish made, which is, are you comfortable given what you've said, because there seems to be zero confidence in Scottish Enterprise from the industry, from all the panels we've heard from, that there should be a continuing role for Scottish Enterprise post the screen unit being set up, or do you think it should just all be merged into one? Film Agency for Scotland? If you want to see the potential that the industry has in Scotland, you need one body to lead on it. Scottish Enterprise does not look like a willing participant, so they potentially have a lot to bring to the table, but they're choosing not to. Again, because of the business model, it's my interpretation that they just don't like two projects a year, rather than a factory that's going to produce ex-widgets and, therefore, why profit? I think that your instincts that we're picking up are correct. The only thing I'd modify it with is provided that that body does have expertise in business, which is something that creates well and doesn't have rightly so. Absolutely. I think that the area of specialism is important, trying to understand the industry and the nuances of each of the areas are important, so perhaps it would be better served if it was more specialised under one group. To give you an idea, I'll come back to the whole widget production concept. Scottish Enterprise covers a huge breadth of organisations and businesses across Scotland. Recently, for example, they've embarked on a business development programme within the media industry called Focus, and they've employed consultants from London to do business development. Our experience of it, again, is that, to be honest with you, those kind of general consultants, so whilst they might be fantastic for, I don't know, a widget production company, what we find is that when we've had that kind of, or needed that kind of business development, we've benefitted much more from smaller schemes. We've had a specialist mentor. We recently got funding from Cann Gale, a Scottish Irish Gallic fund, for a mentor to be with us for 12 months, and we were able to choose that mentor who was an ex-commissioning editor, someone who's got an independent company in London, and they were able to give us a phenomenal device over a 12-month period. That kind of growth development in terms of that was much, much more useful than we, I think, would be than having a large consultancy firm who are more generic. One final point on governance issues around the screen unit before moving on. As it's currently constituted within Creative Scotland, it will have its own board, but it will ultimately be answerable to the board of Creative Scotland, which naturally will never have anything close to a majority of individuals on it from your industry, your industry's plural. To take it one step further from what's already been asked, would it make more sense for the screen unit to be an independent stand-alone agency, which feels like going back in time a little bit, or does it make sense for this to be contained within Creative Scotland still? I would say yes, and one of the reasons is because our industry is very different from the other things that Creative Scotland does. That was what we said was going to happen at the demise of Scottish Green. That's what did happen. You absent the screen industry. There's tremendous competition and dissatisfaction between the artistic community in Scotland and Creative Scotland, finding its feet as a funding body. We would rather not be involved in that because our industry needs different things and has different economic potential from the other subsidised arts in Scotland. Travel? We are where we are. It will start off as an independent unit, but it wouldn't surprise me if, within a period of time, it became totally independent. To move on to another area, we have a lot of time remaining. There has been quite a bit of discussion around what the unit, whether it ends up separate or not, how we balance priorities between Indigenous production and trying to attract larger-scale international production to Scotland. What role should the new unit be playing in getting that kind of balance? As much as we would like to be the kind of country that attracts substantial amounts of large-scale international production, our bread and butter for the foreseeable future will not be that. It will be Indigenous production. How do we strike that balance? Both, but other screen units around Europe, if they're offering you money production to come into their country, will insist that you use a local producer in partnership, that there is consistent benefit after the production leaves to the independent sector within that country, and that's what we haven't done. I would say that's a very important part of it. Just from my own point of view, as a TV company, I am consistently asked to help develop a project. We've got a young writer. We're a London comedy company. There's only a handful of companies that specialize in comedy, for example. We want you to help develop this project for Channel 4 for BBC. If I was able to say, if you do it in partnership with my company, we can access these funds from the new screen unit, that's the kind of thing that builds an industry. There has been no requirement to help production companies as you exploit their talents and resources. That's been the problem. I think that Annie is absolutely right, but I think that you put your finger on the dilemma that this new body is going to have. The two things are not necessarily compatible, and trying to knit them up is actually very difficult, but that's obviously one way of doing it, that we've not availed ourselves of previously. The location Scotland, as opposed to growing the indigenous, are two different things, but the insistence on the use of local talent. I'm going to put in a special plea here for front-of-camera talent as well, because that's who I represent. I think that's just been sadly missing. What's happened is that somebody might get some money to come here in some way, shape or form, use location Scotland, but they're still flying up the day players. They're not the principals, they're not the names that get the commission, but they're flying up the day players from London. I think that's just a thing that should be relegated to the past. We should commit ourselves to using local talent if we're using public money in Scotland, a major commitment to using local talent front and behind the camera. In reviewing the documents before this, you talked about going to Northern Ireland and seeing the success there in going to Ireland. We could actually do better, because there is no great show set in Belfast that's produced by a company, a Northern Irish company. There's no great show set in Dublin. The show that I'm doing at the moment is set in Dublin. Sharon Horgan's company has had just tremendous growth just in the past few years. It's remarkable to think that for all the support that the industry has had from the Irish sector that they've never had an on-going drama set in Dublin that we could all refer to or be familiar with, we could do that in Scotland. We have the talent here, we have the locations here, so to actually aim higher than those other countries. I would say that rather than the one-off big scripted drama set, which is good, I would say that something is a little bit of red carpet favour within the TV industry. The things that really grow the TV companies here and the real golden goose for us is returnable series. If you look at the two biggest companies, they've both got returnable series over the last number of years here, and that's what can really grow a company in any big way. That's not high-end production, that's mass, so it's a number of different daily productions over a number of years. That's really what can grow a company and push it to a development, then becoming bigger and bigger. The other area, for us anyway, that we've seen success in is co-production, so international co-production, different markets where you can go to other countries, and again that's what we would say. There has to be much, much more. We haven't really been able to invest further in that so far because what we've found is that every time we've done it we haven't been able to bring enough money back to the table, so we come back to that. The tax breaks that other countries bring in, whether it be Ireland, Australia or Canada, everyone who worked with or whether it be the public funding that's available for low-end production, because I've never come across even in high-end scripted drama documentary anything that comes close to £1 billion an hour, whereas in the BAI and in Ireland, etc., it's much lower threshold and they bring much more. So we would say co-production is very important to growing the industry and also getting, putting in development towards helping towards getting returnable series, more returnable series to companies will certainly grow companies here in a big way. I agree with everything that the panel said thus far. Two additional things. The inward investment, as it's sometimes called in terms of the buying of our goods and services by a non-domestic producer, is great but at the moment we don't have a huge supply of labour for filming TV. It's very easy for that to then mean that crews and other services are out with a price range of domestic producers. That means, for me, that a renewed focus on training and development, which frankly will take a long time. It's going to take two or three years to ensure that we have enough crews to be able to, if we put a real focus on bringing foreign companies to come and make things here, which is great. In terms of keeping that balance, it's incredibly important that we have trained enough crew. The other part of it, in terms of ensuring a balance and going from a lot of small-scale producers to having just that bit more experience in the world to compete internationally, is where the funding isn't really targeted at the moment. That is, in a big way, what Grant does, which is allowing people who are first-time producers, directors to move from making things that are purely cultural output like short films that have no commercial value to making something that has potential commercial value. That is the riskiest part. That's when the market doesn't want to invest money. That is where the role of the state can be really meaningful. It's not a lot of money, as you heard from Grant, between £1,000 and £100,000 for something that can make an industry in a lot of ways. The final point being applies for increased funding to short films to then increase talent coming through that. I absolutely agree with you, Nathan, but that's one of the things that the new network is potentially a platform. I'm more excited about the new network than anything and the potential that could have for an outlet for the kind of work that you're talking about, which would make such a difference to makers. I agree with all Nathan's points. My bread and butter comes from being a crew member, so I benefit from a service industry. The film industry is cyclical and we have to be very careful why companies are coming to the UK. If you read Alexander Walker's books on 60s, 70s film industry, we have great crew members, but overnight, once investment leaves, we could be left with lots of crew members in the industry. It's absolutely essential that we grow an indigenous film industry. As Nathan was saying, I think that micro-budget feature films are a great way to do that. It's more cultural, but they can have economic benefits. One of the films that was made through tartan features when the filmmakers went on through a film on Nathan after that has become incredibly successful. They're both going to do more successful things so that it can work. It's a great way for something cultural and interesting to feed into the larger part of the film industry. It's scalable and we have to focus efforts on creating an indigenous film industry. At the moment, everyone is making a lot of money being crew members. If that goes, we're going to be left with lots of crew members in no films. It takes one writer's strike in America, and that's it. It's something that Equity had in its submission. Mr Boswell in his submission states that the screen sector is London-centric and there's a danger of Scottish public investment ending up in London. Do you think with this new proposal that that can start to change and more of that money will stay in Scotland? I hope so. There's no reason why it can't, but it needs joined up thinking. One of the biggest players here is the BBC. The BBC for years has been, I think since the time of John Burt, incredibly London-centric. He's centralised all decision making in London. Prior to him being the director general, the powers that be up here had the ability to commission programmes for broadcasts. That seems to have been lost, and even the commissioners that they've had up here have really been a career move for them to get some power and then they've gone back down to London. The industry is London-centric. That is a statement of fact. It's in everybody's interests that we do as much as we can to regear that to make sure that there's as much autonomy within Scotland as we can. Having a powerful independent screen unit, and I sense that this screen unit will be more powerful than Scottish screen was, is a big step in achieving that. In your submission, you state that the UK tax credit system does not benefit factual TV, so reform of that system is much needed. Is that something that the others in the panel agree with, and would you like to elaborate on that? It's specific to our area in terms of non-scripted is lower budgets, so I don't know in terms of scripted whether a million pound an hour is something that is commonplace. But certainly in our industry, it isn't, and every time we've done international co-productions that I've mentioned in Ireland, etc., they have always been able to bring the line share in from the tax system. I know it's a complicated issue and it's not something that can be solved at a local level. However, it should be looked into, because at the moment, in terms of from our industry, which is by far the majority, even the sort of big highest end kind of drama documentary that we might make wouldn't come close. You're talking 300, 400,000, half a million at the very most, so you immediately are at a disadvantage whenever you go to co-production internationally. Hence, you're left with only one pot funding, which is the broadcaster. What that means is that Ireland companies from Canada can go direct to the broadcaster and say, you know what, we'll make it ourselves, we have to have a certain amount of Irish crew on, because of our funding, we don't even have to do a co-production with a local company, we can just go direct to the broadcaster. That is a huge hole, as far as we're concerned, and it could be quite a big revenue. Genotiff has gotten, if that was looked into specifically, we believe, certainly from the non-scripted drama documentary perspective. Does anyone else have any comments in that area? My final question is, obviously, we've heard from yourselves in terms of what you would like to see happen with this unit, with it being a standalone proposal, as compared to what is being proposed. However, Scottish Enterprise clearly has that overarching Scottish economic aspect. If you were to get what you wanted with a standalone unit, what type of role would you see Scottish Enterprise playing at some point in the future to assist with your sector? The biggest game changer for the industry would be a returning drama, three returning dramas, fostered on the new network, potentially going out on BBC One or BBC Two. There would be a great role for Scottish Enterprise to play in supporting, you know, look at what Outlander has in Cumbernauld, for all the facilities needed for something. The way that we had when we had Taggart, if we had something that was partially studio-based that had a returning cast, there's plenty of investment opportunities there to support the ongoing series. When a network decides to do something, it does it. BBC Scotland decided they wanted a soap, they got a soap. The new network needs to decide that it wants a returning series by the Scottish production sector. If we have that, from my point of view, that would be an opportunity for Scottish Enterprise to be involved in supporting that. The funding will be low. We will have a low per hour budget for the new network. That's an ideal opportunity to grow something, to develop something, to bring in writers, to bring in actors. Just having River City, how many actors have had an opportunity for work in Scotland without having to travel to London? We so need that. We so need things that are made here that you can rely that they're going to be made next year because the network has gotten behind it. We're going to develop the series and we're going to make it better at the three series that we're making. That should be the number one priority of the new network and to be joined up with a screen unit. There will be plenty of opportunity for Scottish Enterprise to support that. On the higher end, we can make use of their expertise when it comes to—this is looking ahead—things such as mergers and acquisitions, facilitating and sourcing foreign direct investment in media companies and joint ventures. The kind of stuff that isn't necessarily relevant to our stages in the infant industry but will become more relevant, ideally, as we grow. As well as helping to increase exports and internationalisation, those kinds of things fall pretty squarely within the remit of Scottish Enterprise. They have expertise in those areas but how we get to the point where we can make use of those expertise, a stand-alone unit that has some input from Scottish Enterprise would be really positive. Can I just cover a couple of areas that have perhaps been covered in depth? Annie talked about the importance of the new BBC network. The role of the broadcasters is something that perhaps we haven't looked at. How important is the role of the broadcasters in Scotland and the BBC in particular? What are your views of the current off-com review of the out-of-London criteria? How would you change that? Absolutely. When IPS first started up, we were very focused on Creative Scotland and getting Creative Scotland more supportive of the screen industry and Scottish Enterprise. Then we realised a few years ago that it was the discussions around the licence renewal and the BBC and looking into what the spend was. I did the keynote address at the 2015 Industry Days of Glasgow Film Festival and spent ages going through the material and it is really shocking. 55 per cent of the money raised is a generous estimate. I think that's outrageous. When Lorne talked about the centralisation under John Burt, it's actually under drama. There's been a tremendous centralisation under the previous two heads of drama of taking power away from regional drama commissioners. Can I just end it in there? We had them here two weeks ago and we put that point to them and they were absolutely adamant that they had a drama commissioner in Scotland. I met the head of business a year ago. I met the head of business affairs of the BBC and I was talking to my colleagues before saying, what's the most important thing to ask them? They said, is there a decision maker in Scotland? Can you greenlight something in Scotland? I asked them that point blank and he laughed. He went, oh, no, no, but you see the great thing is that now we've got this person so that the BBC is, you know, so there's communication between the London head and the Scottish head. It's unbelievably patronising that we don't have, you know, in a country that has the skills, you know, that Sigma can get a Netflix commission and can't get a BBC drama commission. It's outrageous, but it's just a constant battle to be part of the inner circle in London and you can understand it when you get close to it, that there's this huge amount of money, huge amount of pressure. We've got to have a hit and you keep everything close to you. You don't want to greenlight something by somebody you see once every six months because they fly down from Glasgow to have a meeting with you. It's just, it's very difficult to get anything through. And I don't think things have changed. I really don't. The one, the one, there's a, the STV got a commission from BBC drama and Claire Mundell got the commission. And, you know, having worked at the BBC, I don't see anybody who doesn't have insider knowledge of BBC getting any commission out of BBC drama. You, you, you force them. You say, we only, we'll give you 55 per cent of our licence fee if you're only spending 55 per cent of the money here. That's our, or devolution of the BBC. That's the only way forward because it has not changed. Is that true, Nesa? Sorry. I was going to say, if you get the BBC in front of you again, ask them what commissions that individual can make. And the answer is they can do nothing. They have entirely depended on someone in London to greenlight. It's like a series of parallel gates. You've got to get through the first gate in Scotland, then you've got to hope that your idea is still current and vibrant and alive and then you hope for the other gate to open and then you can go through. But the chances are that something happens in between and the second gate never opens. So there's a real log jam there for commissioning. Can I just, sorry, can I just talk about the out of London definition? Because I think that's absolutely key. Ofcom used to produce a list of all television productions and where they were assigned to. And if you ever have a chance to look at that list, they now make it harder to find because it is a piece of Alice in Wonderland. I mean, it's just absolutely crazy. So the definition arises from where the production spend is, where the majority of the crew come from, where the post production is, where the producer's based, but it excludes what happens in front of the camera. So there was a production that I was talking to someone about just beforehand. I think it was a year in the Hebrides and it was a production about the Hebridean landscape and a man went to live there with his dog and it was absolutely stunning. That was a South East of England production because that's where the production spend was. Gavin and Stacey, you would have thought that would be either South East of England or it would be Wales. I think it was Midlands. I think it came out as Midlands. I mean, it's complete Alice in Wonderland. If Ofcom could bring some clarity to where a production's based and including the front of camera spend I think would be a big part of that, then I think the whole idea will be much more credible. But I would urge you to lend your shoulder to the argument to say, let's have total spend rather than excluding what the viewers actually see in their definition of an out of London production. Do you think that we should Ofcom, and indeed to extend that to the new screen unit and how it awards its funding, should we be looking to places like France and Canada, who certainly when I speak to programme makers tell me it's very, very tough the criteria and if you're going to get money out of those countries you absolutely need to use writers and producers. I think that we were hearing about the Republic of Ireland. Yes, in a word, I think that we should be championing the skills and the talents that live here. From the perspective of actual, Ofcom have been up to Glasgow and talked to a number of producers here, which is a really good start. There were some things that we had a really good discussion about how they should take that forward. We are very hopeful that they will tighten up those definitions to avoid any further fiascos. From the BBC perspective, it's fantastic that we've got this opportunity now of the new network and it's great that this money has come in for the new channel etc. It's incredibly competitive that the last few rounds that have been there have taken months just to come back with a year and a year regarding ideas, so it's not an easy hit. It's a good start. It's fantastic that additional 20 million or so has come into Scotland. It doesn't even begin to make up for the disparity of the licence that he spent here, which should really bring in, if we were to get up to Northern Ireland levels, another 80 million or thereabouts. If that kind of thing was lobbied and pushed for, that would really grow the industry as a whole over Scotland, whether it's in drama, scripted or not. I live for bigger budgets for starter as well for drama etc. It's excellent. It's a good start. We've found the BBC, our experience of it, is similar in some ways in that it's very much London centric. They've always tried to make it to other regions. We have found this whole issue of commissioning executives up here that have come up here to Glasgow or based in Glasgow being the middle person, unfortunately, when it comes to real decisions. Sometimes it goes back to the cat channel control or something as simple as a one-hour documentary. Sadly, they don't have as much power as we'd like them to have. I think that the Scottish Green Leadership Group, however, takes us forward, should have a bigger power in lobbying for creative powers to be invested in the regions and more production spend happening up here in Scotland. You'll also know about the move to bid for the second home for channel 4, which I think would be a really significant thing. I really don't see how it couldn't be in Scotland. We were talking about, there was a group meeting to discuss this, that it'd be a Scottish bid with a Glasgow base. That would be the idea. In the press this week, all of the places mentioned have been English cities, which I don't see how that fulfills the criteria. For the Scottish Government to really get behind that bid, I think, would be fantastic. It's fair to mention that the BBC isn't the only broadcaster here, and I would say that it mills ahead of the other broadcasters. Channel 4 commission a number of series here. Again, they have a returnable series with some of the independent sectors that have really bolstered their business. It's excellent and absolutely good with Annie if we could get something more up here because the regional office has been scaled back in the last few years. That would be an excellent step forward. We also have to look at the other broadcasters, STV and others, as a complete and as a whole, as to what they're doing here. There are quotas, as has been mentioned, to regional quotas that have been implemented by BBC and Channel 4. We would again expect lobbying to happen that that has gone right across all the broadcasters to make sure that it becomes a more level playing field compared to what's the London-centric nature of the business. I thank the panel for giving their evidence today, and we'll have a short suspension before we move to our second panel. Good morning. We continue today's evidence session on our inquiry into Scotland's screen sector. I'd like to welcome our second panel of witnesses, Dr Michael Franklin of the Institute for Creative and Cultural Entrepreneurship at Goldsmiths College University of London. I welcome Neil Cairns, a production accountant. I welcome Arbella Pagecroft, who is the producer of Black Camel Productions and who is very familiar with those types of inquiries. I know that you were all sitting in the gallery for certainly most of the first session of evidence, and I saw some of you nodding vigorously at various points, particularly later when we were talking about broadcasters. I wondered if you would maybe just like to come in and reflect as to why you were nodding vigorously or any other points that you want to make reflecting on that evidence. I was interested when you were talking about the commissioners and the power base in Scotland. All my colleagues here, we are really excited about the opportunity for the new Scottish Channel and the potential commissioning is significant for everybody, for all of us, and that is fantastic. We do have a drama commissioner in Scotland, and I'm sure that when the team were here they were vigorously saying that, but the power and the decision-making is still resting in London. At Black Camel, for example, we have a first look deal with BBC drama in Scotland, and that's great because it's very good for the narrative of the company, and I do feel supported by the BBC here. Nevertheless, when it comes to getting the project greenlit, that's not a decision that's made in Scotland, that will then go back. She absolutely has power and influence, but the decision rests with the commissioner and the controller in London. I would also just say in terms of what I would like to see with BBC Scotland, and I come from a sort of drama and film background rather than any other genre. It would be great just to see some risk taking and some, you know, I think, you know, I often sort of look at the Swedes and the Danes, and I think that's what we should be doing in Scotland. Years before the killing and borgan and the bridge and the legacy and all those fantastic series that have kind of created Nordic noir, you know, those were countries that were still making drama and they were learning how to do it and they became really good at it before they broke on to the international stage. I think, you know, we have a shot with our new channel to really attempt to make some drama and try to get really good at it here with our indigenous companies, and that's what I would like to see, you know, BBC Scotland and, you know, the screen unit really championing saying, you know, we've got to focus on our indigenous companies and, you know, we were talking a lot about returnability, how you build your business, that is how we're going to build our businesses. And I've just come back from Mitt TV. Mitt TV is the international market where all the buyers and the distributors go to sell and, you know, you find your co-finance in market and you meet everybody. I think there's a, you know, there's a big desire for Scottish products. Scotland is, you know, it's seen globally as a wonderful place to live. Edinburgh's an exciting city, people love Glasgow, you know, the Highlands, everything that we have, you know, as we know, as a nation in terms of taking that, you know, almost selling our nation in our dramas to the world. And people want to work with us in Scotland. So, you know, it's just a bit more investment, keeping investing. People really want to partner with Scottish producers and they want to do business. You know, I mean, I've been talking, I can talk about lots of things, but I'm about to make a Dutch co-production of feature film with Luxembourg and with my Dutch partners. And in the finance plan, the Luxembourg film fund are putting in one and a half million. The Dutch film fund are putting in 800,000 and I am putting in 250,000. Yet I'm shooting for as much as I'm shooting in Luxembourg. We're having as much of the shoot here. The story is set in Scotland. Apart from the lead role who's going to be Dutch, all the front of camera is going to be Scottish for the most part. And yet I'm still the poor relation. You know, I haven't been able to bring nearly as much money to the table. I applied for cultural funding, wasn't awarded it. I was awarded production growth funding. So I don't have the equity stake in the film that I should have. So I've digressed completely from drama onto films. But you know, so there's a lot of issues for us to kind of untangle, I think, you know. Why is that? Why is that happening? Why did that happen? I don't know whether there was, I think there was a case that we ran out of money when the application went in and so it was moved to production growth funding rather than cultural funding. It was the end of the year, I believe, but I wasn't, but you know that that is important for producers because that part of IP of owning that share of that film and a film that I believe that can be a sophisticated thriller and can travel has been substantially reduced. And because it's a European film, it won't necessarily be able to hit the one to six criteria of production growth. So that's another area that I think that if we're making Indigenous films or we're partnering with European films, you know, if you're going to have massively high ratios for inward investment, I don't think that can be for Indigenous companies where you're trying to build your co-production network across Europe because, you know, very few European films can hit a six to one spend. Outlander, yes, the American series is coming in. Of course, we must do that, but not for our own producers and especially when we're trying to co-produce with lots of different countries. The idea of the new body, I don't know what it's going to be called, is the new creative Scotland body, the new screen body being much more industry-focused and led and more responsive and perhaps without the input of Scottish Enterprise, I think that would make it a much more flexible, adaptive and reactive body. Thank you. Thanks for inviting me today. I'll just ask you a question about what struck me from the last panel. I thought that it was a really good point, several points, made by pointing out the necessity for commercial thinking within the screen unit and the ability to capitalise on intellectual property and set up conditions in which that's able to happen. That's a very complex set of arrangements that needs to happen, and Mr Boswell made a great point about it being joined up thinking. I think that we were discussing the overview of the unit as it set out and all of these things that it sets out are correct and important and matter and that devil is in the detail and how they are all linked up because they all knock on to each other. For example, the ability to access funding for different aspects of a business that has technology, which has creative intellectual property, which needs for skills and training, all of those need to be thought through and supported and within, hopefully, a one-stop shop with a capacity to deal with that. One of the themes that struck me was integration within those aspects of business and creative thinking within the unit, but also within the industry, both within the UK and, as Arabella points out, European and internationally. It is a very international business, from individual tranches of finance to individual members of crew and departments. I think that thinking about commercial practice and integration with the industry is a really key thing. I will ask someone who has studied the data. We have talked a lot on this committee about the criteria for Scottish spend in the context of broadcast and off-commer looking at that, but there is also the criteria for spend in the money that the screen unit will distribute. The previous panel on Canada and France came back to me in Ireland as well. The criteria is really tough in terms of whether you have to employ so much Irish crew or French writers or whatever. Do you think that there is enough thought going into how the screen unit is going to do that and is the data there to be able to deliver that? That is a really good question. I think that there are two parts to unpack there. One would be—I do not know the level of thought of thinking or the ability that has been applied at the moment, but it will be applied in the future—the impact of having tough strict criteria and the absolute benefits of having those is absolutely a thing to pursue. The ability to affect that and make that have an impact depends on how much money you have to spend. If it is more onerous than it is, but it is worth it for me as a producer to come here or do a co-production and come here in access or work with an Arabelis company and come here and do a co-production as with Luxembourg and France and what have you, then international producers will do it and pursue it. It will be easier for indigenous producers to go out and make those deals and make it attractive. If you have to go through those hoops and there is not enough money to make it worth your while, then an international co-production will not do it. That is a question of really looking through all of the potential options. A producer will go to—and this holds for services, post-production and deals and what have you—I could make this film in three locations. I could get some money from a certain European production and a UK—it will be a UK co-production or something like that—but run through all of the possible incentives to do it, one of which is how much money I can get as part of equity software. I could get half equity from the public funder and what does that mean in terms of hiring local crew and so on. Another aspect is, is there linked to that fantastic facilities and a post deal, which is going to put some equity into the film as well and make it effectively a cheaper shoot? All of those things interact. That is exactly pointed to your next point, which is the data about how that is managed. You would think that, within the screen unit, people are looking at what are the potential aspects for films of different size, where could they possibly shoot and what would be the knock-on effect of that. As I understand it, that data does not certainly exist, to my knowledge, within Scotland, but it is also an issue across the creative industries and across the film sphere. Different agencies are better than others, so say-and-say has a fantastic data system and they have got lots of money from the French Government. BFI has done some really good stuff recently, but that needs supporting. As you see from the sector deal for the creative industries, which was announced recently, that is pointed out as a specific thing that everyone across the creative industries needs to work on. On my point of integration, looking for where there can be efficiency, especially around data—I know that this is part of another panel that I hope will be able to contribute to, but it needs to be interoperable. Data—those information points that apply to a film here in Scotland, shooting in England and what have you—we need to be able to have the capacity to understand all of it. The work of this committee follows on from four years ago, when the Enterprise Committee looked at the film and TV sector, and the McCormack report. One of the strong messages from the inquiry a few years ago was the need for a film studio in Scotland, which was around studio capacity. In that time, we have seen the success in Belfast. We have seen Manchester create a studio. I think that Liverpool is now building a studio. When we have taken evidence during this session, there has been the discussion around the Pentland studio that has been proposed. We have recognised the success of the Ward Park studios where Outlander is. Do you think that that is still the key issue around studio capacity? What should the screen unit be focused on? What should the aim of that be in terms of increasing studio capacity? I think that there has to be a film studio. I think that there has to be something in the west of Scotland. I was working on the Netflix film last year. We were based in the old Scottish Water building in Pawsall. There were two other productions in there at the same time as one of two smaller productions. There was also a production two miles away in Hindland. During the summer months in Scotland, there was certainly a big demand for studio space. We had to go out to the Motorola factory to build our sets, so we spent hundreds of thousands of pounds building sets out in that out there and having people travelling backwards and forwards across. If we had something, Pentland studios could be fantastic for Edinburgh. In the long term, that would be a great facility. Edinburgh crews will build up. At the moment, the vast majority of film crews are based in Glasgow, around the west of Scotland. In practical terms, the new body should look at that. There should be some sort of facility in there. Even if it is only turning Balmoral Road into big production offices, it does not have to be a fully fledged studio. I do not know, but I think that that would attract further business for us. I have made a lot of films in sheds. I would like everybody, particularly the crew, who are working in these buildings all the time. I think that it would be fantastic to have a studio in the west of Scotland. I agree with Neil completely. I would just like to point out that I completely agree that the more capacity, the better. Nathan made a really good point earlier in the first panel. It has an knock-on impact in access to crew and talent. There is quite a polarisation in the types of films that can be made, so there are successful lower-budget films and successful very high-budget films. The great success that the UK has had with high-end TV means that the key talent, which is used to green light or bankable stars, are attracted to being committed to these longer seasons, which makes it more difficult for independent film producers. I would like to point out that the UK has a lot of options to access that talent and to go into production. Taking that on board as well as having a holistic view of how we support studio capacity, how that is linked to financing, is really important. If you look at the patient capital review, which has just been concluded and new guidance is issued around EIS funding equity investment scheme, that has just been reviewed that the risk to capital allocations have been changed. That will have an impact on film financing and the amount of EIS funding or the type of risk that is pursued by EIS funding, which forms part of a tranche of a feature film. People go to a production studio, often production studios have a film fund that is linked to that, so Pinewood for example has a TV fund and a feature film fund, and they advise and manage or have advised and managed other film funds, so how those are linked is really important. You might have seen some of the newspaper reports around the finance that was given to Outlaw King, the Netflix film. The coverage in the media was fairly negative about the investment that had been given. I think that it was £1 million that was given to the company for the production, not to comment on the Outlaw King. Do you think that that type of investment is appropriate? Is that what is needed to bring in? Is there any conditions that should be attached to money that is given that is public investment? Is that a misunderstanding of how the sector works? I think that there were some conditions attached. I think that there was a minimum spend requirement, but we were always going to hit that anyway. I think that Group Scotland typically requires something like five to one. If you invest £500,000, you need to prove that you have spent at least £2.5 million, say, in Scotland. That is broadly defined. It is not Scottish crew or facilities, it is hotels and prudems and various other things. That £1 million that came into Outlaw King would not have made any difference in reality to Netflix. Netflix was going to make that film anyway, but it might make them come back. They look at the bottom line. They say that the net of this film is such and such an amount and that they take into account all of the tax credits that they can get, any public sector investment that they can get. That is absolutely vitally important to them. I worked on the trains button two the year before. It was similar with Sony. They look at the bottom line. They have their budgets. They think of everything as net. What is the net cost of this film? Then they can work at what is going to go into profit. Again, Creative Scotland invested money into that. It might not have required to do it. It would not have changed the decision that Sony made. It increased the budget slightly, but it might make Sony come back. They think that this is an accessible fund. It does not have many drawbacks for us. It is not onerous. We would come back to Scotland knowing that that is potential available to us. It is on top of the UK tax credit, which is extremely valuable to the American studios. It also does empower the producer. That bit of money just says that she is a producer. We take seriously in our country. That is important, a recognition to the world as well. For Netflix to see that, I think, coming in to see the support for Zygma and for Gillian and her team on that film. I would advocate it. I know that Zygma is a huge amount of money. It would feel like a huge amount of money. In terms of the revenue, I hope, generated by the film and should they go again. I think that it was money well spent, I hope, for all of you and for all of us. Ian Smith, in the first of your panels, made the point that it is an incentive and added bonus that makes it a good place for investment in filmmaking. As part of the British Film Commission, a lot of questions were made about the open or forward-facing or open-facing. Is there a one-stop shop where people can come and find all this information? This has been a priority for us to get this right. Link to the type of incentives is a need not only just to be responsive to have a nice front-facing website, which is really clear that all of these things are on offer and how you can come and access all our facilities and money, but also for there to be outreach. The British Film Commission, of which Ian Smith is the chair, is constantly going on outward-bound missions to Los Angeles and other places, educating people about the tax credit, and educating producers that might want to come to the UK about the main facilities that we have in London and the south-east, and, of course, taking people on fact-finding missions that you yourselves have been on to Yorkshire or Manchester and what have you. As part of the outreach and outwardbound, part of the holistic element of the screen unit, that has to be part of it. So that when people in different countries are being educated about what is on offer here, they know that there is, in the countless years or whatever it is that we have, so it is about being proactive as well as responsive. Just a quick supplementary to that, do you think that perhaps the negative publicity that that particular investment generated was perhaps triggered because it was basically creative Scotland giving the money, and perhaps that is an argument for a standalone agency, because basically you've got maybe a small theatre company that's lost its £15,000 a year because of a decision, then looking at Netflix getting this money, and perhaps the two don't sit particularly well together? That sounds possible, but I can understand how you can conflate both of those when it seems as if it's coming from the same body. Richard Lochhead Can I just ask Neil Cairns looking at your biog and our notes? You've worked internationally in various productions, and we've had some key messages about the support or lack of support at times in Scotland. Can you reflect on your international experiences and where Scotland sits in terms of your perception of support given in each country? I think that Scotland sits rather well. For example, I've worked in Vancouver and New Mexico, and they have greater incentives based on employing local labour and using local production companies. It's a local production company that can get access to tax credit. In Vancouver, it's up to 35 per cent of labour is accessible on top of other state subsidies that have led to Vancouver becoming a hugely successful production centre. Similarly, New Mexico is a very good incentive for employing New Mexican labour. In terms of Scotland, I've worked in a variety of productions in which sometimes people have come to Scotland because it's specifically—for example, Outlaw King came because Julian Berry's a producer and David McKenzie's the director, and it's Robert Bruce that's set in Scotland, or Trane Spossing set in Edinburgh, so there's some very specific things that have come here because of that. I worked on The Wife, which is a Glenn Close film set in America, and in Stockholm. It's a fantastic film that hasn't released yet, but it's done to do with Scotland, but the producer came to Scotland because he'd previously made Churchill here, he'd got support from Great Scotland and came here to make his £5 million film, dressing everything. You've very successfully created New York and New Hampshire and Stockholm within Scotland, so I think we have, we've got good crews, we've got, I think the support is good, the creative Scotland support has been very successful. When people get it, obviously, because it's a competitive structure, people have to apply for it, if there could be some way in which it could be made more definite. If we found a way of getting at some sort of labour incentive where you employed Scottish Crew, you got maybe 25 per cent back on that on top of the UK tax credit. I mean, we already, in terms of the production growth fund, we already asked people to hit a certain minimum Scottish spend or a multiplier of a Scottish spend, so perhaps we can do something like that where producers would come in advance and know, okay, if we employ such and such a Scottish crew, then we'll definitely achieve funding. We're not just applying to Scrut Scotland and hoping that we get money, we'll say, well, definitely, we know we can do the UK tax credit and then on top of that we also can get another 20 per cent because we're employing lots of Scottish Crew. So I think Scotland is a really good, flexible country to make films in and I think a lot of people recognise that but it could be even better. The new BBC channel, Arbel made this point, and it made it in the previous session but didn't have time to follow up. How do we use the opportunity of the new channel as a springboard to grow capacity and grow the industry and actually grow non-BBC production in Scotland? We spend a huge amount of time, as a committee, quite rightly scrutinising the BBC and its quotas for Scotland but there's a whole other world of production out there as well. It strikes me that the new channel is an opportunity to grow an industry that will have considerable benefits outside of the BBC. In particular, the screen unit, what relationship should the screen unit have with the BBC and the new channel that allows for much wider industry growth? First of all, I am concerned about the budget for the new channel. I think as a drama producer it's a very low budget given the responsibilities that's been given to produce news and the like. So I am really concerned about if we are going to create some Indigenous drama from Scotland, that is an area for definitely more work and more lobbying. I have a distribution relationship with all three media and that is a direct route to market. BBC Scotland and BBC Scotland are an amazing brand for us to be able to take to the world. If I as a producer can go to my distributor and say, I have just got a six-part drama series from BBC Scotland, I can get the rest of the money from the world. If that's even probably 30% of the budget, 40%, I can go and get the rest of the world in terms of deficit finance, international co-production and partners. I believe obviously if it's a commercial genre. My first point would be let's ensure that we keep lobbying for more money because if there's more money and we can have more commissions and we can hit returnable series, that is where our growth is. All three media have taken a risk on me recently, but they know that if I deliver them one drama series that strikes and returns, that is where the gold is. I think that you were talking earlier in terms of risk versus public funding, we've got to take risk. I remember when I got my first late funding from Creative Scotland and I made one film. I was at a very high risk for them to put a bit of money into me, but they took a chance. We've got to be taking a chance on our producers at this point. They are hungry to deliver. They are hungry to go to market. They want to be able to have a shot at this. There is huge excitement in our industry about this channel and what it can deliver. We need to get more money into that channel and we need to get more money out of London so that we can deliver. That can have a huge impact nationally and globally. Globally, I think that we're going to deliver some fantastic programmes. Let's do it. In terms of the new channel, have you had much engagement from BBC Scotland so far in the discussions around it? Good afternoon. I'll feed back. Excellent. The new scripted person has just been appointed, Gavin Smith, so I've got a meeting with him. I'll find out what their budgets really are. Rachel Hamilton. We know that drama has been one of the large global growth markets, but Scotland really hasn't taken that in terms of the significant growth that we've seen here. I was lagging behind, I suppose. I did notice that the screen sector had recommended that we need more support in writing, developing and producing skills. I was also looking at the high-end TV levy fund, which has a contribution of a skills levy of £2 million. I wondered if any of the panellists knew how that skills levy was actually spent in Scotland, if that is what the skills we are requiring to increase drama production. I think that, presumably, that's skillset. We've got five skillset trainees on. I'm working on a film called Born to Run just now in Fraserborough, and we've got five skillset trainees on that just now, so they're obviously at the very beginning of their careers, one in sound, one in production, one in assistant director. Those skillset we pay, the wages, and then skillset refund half of that to us. Five trainees is obviously very useful for a relatively low-budget film that we're having half of their wages subsidised. That's the way it has worked in my experience. Low-budget films tend to access skillset trainees. I'm not sure—I'm not aware of any other element of their funding. Neil, do you think that the ambition that the screen sector has to increase drama production by 100% is going to be achievable with those skills within the timeframe that they have set out and the growth in terms of the financial growth that they've set out? I don't really have an overview of that. I think people can be trained up relatively quickly. The NFTS has now set up in Glasgow as well, which will help to refine and hone higher-end skills, which we definitely need in Scotland as well. Last summer, I was working with five outlander in common, all three productions in Balmore Road and one in Heinland. There's hundreds and hundreds of Scottish crew members being employed. There is a pretty big production base. Some people then go back and do other things in the winter when there's less production, but I think there is quite a big base of people. To develop that, if we have the skills and we are investing in the skills, why hasn't high-end drama productions increased at the rate of the rest of the world? We don't have a studio. We just offered a job in Cardiff because it's got a studio. The last three big jobs were offered, one was in Cardiff, one was in Budapest and one in Manchester, which I haven't taken any of them, but they're all because of the studios there. Are studio productions producers based where in London? The London one is Doctor Who producers who are making a big production in Cardiff, but they're also based in Cardiff. The Manchester one is a London producer. The Budapest one is an American producer. I think one of the issues that we have faced, and I think that you may not see a return for a couple of years, but we have now. Clemence Dell has just got the cry, which is a drama commission. That's an Australian Scottish co-production, that's a four-part drama. STV productions, after a lot of investment, get Alan Clemence, so how much investment he's put into his drama development. I've got this much compared with what STV have had over the last however many years, but they have now won two commissions. They are definitely back in business, so that's really good. That's Indigenous companies now producing drama. We want to see much more of that. I'm like this at the moment waiting for a commission like this, so hopefully very soon. These are game-changing amounts of drama. It's early days, but those are Indigenous companies with dramas that are going to shoot here, and that's great. We'll see if they return. I don't know whether any of them can return. I don't know the scripts. Produce is a precarious business, because it's quite difficult to teach the skill set of a producer, because you have to have a nose for a product. You have to think, can I do something with that? You have to take a certain amount of risk. You have to say, is that worth an IP worth chasing? Should I option that theatre show? A lot of it is so about the personality of the producer. I don't know in terms of skills. You can't quite put your finger on. There are different types of producers who come through script editing training through the BBC, so we should definitely be putting lots of money into that. Those are really good script editors, but there are different producers. Nathan has come from an economics background. I've come from the floor from being a runner for many years and making lots of tea and coffee for people. We all come from lots of different places. I'm not sure I'm exactly answering your question, but I'm saying investment in writing our best writer. If we can develop our writers over the next five, ten years, they're going to be the showrunners of the future. Let's keep plowing that skill set investment into them. Stuart McMillan First of all, the point regarding a film studio has come out very strongly, not just today, but certainly in other sessions that we've had. Mr Key and Drew spoke about one in West Scotland. I think that the Greenock and Inverclyde constituency would be an ideal location to have another film studio just to get that on the record. There was one point that came out from today, which I think has been really important as well. The whole issue of internationalisation in the process meant that Mr Crawford and I used to talk about this Scottish-Australian production, and Eiloron about the Scottish Dutch and Luxembourg. Mr Key and Drew spoke about the programme between Scotland and the US, with the Sweden and US link. How prevalent is this within the sector in terms of the multinational production operations on that? I have not worked in so many Scottish co-productions in mainly London-based co-productions. Obviously, things like Filth, which had Belgium and Swedish co-producing elements, but most of the lower budget... A lot of international co-productions. As the budgets go higher, we tend to co-produce more. I have another Australian project that I am considering at the moment, whether I would like to co-produce. A lot of it, again, is coming down to our companies, though. Our companies are still very small. If I had somebody who was an in-house line producer, I'd be saying, right, let's chase all the co-produ... Let's have lots of co-production, let's bring them in, let's get those productions churned over. But I think, as we heard earlier, we've got to be making more productions a year and not waiting and seeing our producers only making a film every three years. We need to be... If these companies are to be built, one of the things I do feel, and it leads on from international... If international leads to more business and more films being made and then we can actually get more money into the businesses, it's about enabling producers to staff up, which is one of the things I'm quite keen to see at the moment. Absolutely great point, and it links to the previous question about skills as well, is that a demonstrable impact can be made by hiring one other person, one of the very good person, as a development executive, as a line producer that within a small... These are all very small companies, certainly, in Scotland, but having that does have a demonstrable impact. I mean, there has been, I've noticed in kethycological examples of... There was a creative England scheme that essentially was just... They'd cover the costs of a person working for a small production company for a year. They then, not only learn the on-the-job skills of having to be a producer, how to do that, but also at the same time as working on a larger budget film, were able to develop their own ideas and go on to then develop their own career and perhaps long term have their own company. That support is something that certainly is achievable with a relatively small amount of money compared to contributing to a larger budget of huge productions. In relation to the idea of internationalisation of co-productions, I think that it's a really good point to make at this particular juncture when we are possibly faced with the lack of access to creative Europe or media funding as was in the next few years. So, there's a potential that that will be lost, and there's a report out recently that identified exactly what support was made available to the UK during the life of the media fund, which was substantial. And so, if that is not going to be accessible, we need to find a way of supporting people to access international co-productions or replace that money. So, that is a strategic point that we need to make, and linked to that is understanding what benefits that has to your company. So, for example, if you have a returning series, which are the key assets that TV and film companies have made, if that is done by a broadcaster in the UK, the international returning rights are set with the company. So, they're able to capitalise on that IP and get investment on the basis of that. So, that's how you see federalised larger distributors go in and buy a proportion of a producer in order to do that, and that's how they get scale to get to these multi-million pound companies. That right allocation is not the same if you're dealing with an S-fod company, a Netflix. It's a buyout. It's a cost-plus model. So, that IP is handed over and no incremental returns are available. You might get another series with that person. So, the Crown series 1 and 2, and that is fantastic and will set out that company in terms of direct revenue, but it's not the same thing as ownership. So, mapping out these different scopes for the business is important. The businesses within Scotland is important. What are the potential routes? Because it's great to have these top-level figures of what we want to get to a certain number of companies, a certain number of turnovers, but there are multiple different business models within the film and television sector, which have different approaches to risk and how they construct their projects. It would be great to see one of the things coming out of the screen. If you've got producers who are keen to hire, for example, I've been working with freelance scripted editors and I really want to take on a head of development. I've identified somebody who's been working at Sky, working on Stripeback, working with me across a number of projects. She's keen to go full time, but I can't afford her, but she's one of my game changer members of staff. I'm not going to be able to access any money at Scottish Enterprise because I haven't got the huge turnover. How do I facilitate that? The only way I can really facilitate some high-end personnel employment is if I have a big series and I get a big production fee and that goes into my pocket. There's a window here where I haven't got a big series yet, I haven't got a head of development yet, and this is where we're very vulnerable, where your aspirations and ambitions are big, but there's a point where another member of staff can be a game changer. See with the new screen sector, as proposed, do you think that that will help you in your position now, but also other businesses? Do you think that that will help deliver that? Definitely. You can incentivise producers and say, look, we can give you a percentage towards a member of staff. Go and see if you can get 30 per cent out of the market, if you've got a distributor relationship or let them argue the case. All the companies have got different cases. It may come and say whether it's fact or entertainment or we're looking at different genres today, but we've heard from Caledonia this morning that they are really struggling in terms of their development people. I'm struggling in terms of my producing partners of producing for other people so that we can keep going. We need to take stock and go, right, what have we got here? Who are our good producers? How do we help stabilise and create sustainability while they are in their ambitious phases of growth? Mr Franklin, you mentioned a few months ago about the European funding. Are you aware of any discussions around that in terms of when the UK does lead the EU, in terms of any continuation of that type of funding? There hasn't been, as far as I'm aware, any complete firm confirmation about what we'll be able to access when we leave. At the moment we're at it until we leave, we've got access to it. There is also currently, you'll have seen the creative industry sector deal, the large allocation of £150 million to the creative industry is more broadly across the UK. Even that, as I understand it, has still not been decided whether this is designed to replace some missing money that we previously would have got from those programmes or it's additional. So it's unclear. What is really clear is that those aspects of media funding have been impactful over the last 10 years and we need to find a way to replace them. Also it's important that when it's replaced it's done so on a basis that is fair and equitable and better representative of diversity. I think that recently a conference was showing that the actual amount of money going to female directors was 20% of the money compared to others. So I think that, as all of this, there is an opportunity to build something new and very ground up well organised and that optimism from the new station, from the new unit, from the investigation across the whole UK on data and organising it properly is a really good place to build upon. But it's sort of an unsaid bit at the moment. We haven't been part of your homage for a while, which is a co-production agreement. But as we made from the previous point, we need to think about ways to incentivise collaboration and ways to make it as easy as possible for these international larger scale co-productions to come to pass. As people have mentioned, it's incredibly competitive. Yes, we have this fantastic boom in high-end television, but typically independent film companies have been marginal and continue to be marginal as corporate finance businesses. Lot of people want to move into high-end television, but it's incredibly competitive. Not everyone is going to succeed to do that. So, as I mentioned in the first panel, the ability to have the core factual returning commission's indigenous productions built on to routes of access to scale-up to access these large international possibly with private sector, or even you see a lot of co-productions with, so I'll have maybe Sky from the UK, an American studio and then a national broadcaster. So, Berlin Babylon is a recent one, I think. It's one of the largest foreign language ones with a German national broadcaster. But to look into all of those potential models and how we can best support them is really important. Addibility, do you want to say something about the Brexit impact? Well, as I said, I've just come back from TV and from the market, and every meeting I went into everybody went, what's going to happen? At the moment, everyone's happy to continue, but there's a big nervousness in the market about how European countries are going to partner with us subsequently. So, we do need clarity over that. Also, I was trying to set up a route to Netflix, very difficult for everybody to get to Netflix, but there was a potential route to Netflix, and Netflix have a European quota. I was saying to my partner on this particular series is a French co-producer, and she said, look, what are we going to do? And we said, well, if we end up with it going to Netflix, and who knows whether it will or not, will I have to set up my company to set up a company for that show as a European company, not as a Scottish company? I don't know, but that was just something that, with a European quota under Netflix deal, may need to be something that we cross a bridge at a certain time. I don't know where we're going to be, but yes, there are concerns from international about how to work with us at this moment. Interesting. We are slightly over time, but I'm aware that we spent a lot of time in the first panel talking about the Scottish enterprises role within the screen unit and the configuration of the new screen unit. The new screen unit is a collaboration of different agencies within Scottish Enterprise. It's fair to say that there's been quite a lot of negativity towards the role of Scottish Enterprise. At the same time, Nathan mentioned that at least it brought business expertise, so I wondered if you were able to reflect on how you saw the new screen unit, how you saw Scottish Enterprise's role within the new screen unit as a positive thing, or would you rather you weren't there? I think I speak for pretty much all the independent producers when we would strongly advocate for an independent unit and with the resources from Scottish Enterprise put into that unit. I think that Nathan made a good point when he was talking about mergers and acquisitions, and when we do have companies of scale, maybe at that point, when it becomes more corporate, Scottish Enterprise's expertise will be valued. At that point, when we are growing our companies from the ground up, we need a screen unit that really gets under the skin of the whole industry and begins to know that the great thing about Scotland is that we are not a big country and it's not difficult for those people who are in running the new screen unit to have a really clear sense of who are entry level, who are mid level, who are the potential big players. If we put that strategic system in place, you can see the growth, and then maybe that's a good idea at the right point if there is a merger and acquisition and companies are growing, then they move into a more corporate position. But one screen unit for the companies that we have at the moment, maybe excluding STV and IWC, would be fantastic. I think the argument is that they will be there for the larger companies. It surprised me to hear you say that you've made sunshine on Leitha. Most people think of you as a big player, but you don't qualify for that kind of support. It takes one drama series to radically transform a producer's turnover, radically to take you up into the 10 million turnover a year, so it's all to play for. That's the thing. No, but I'm not there yet. It's one final point as well. We need to talk about leadership. Obviously, there's a lot of uncertainty in the industry at the moment about the leadership of the screen unit. Sorry. So we are really pleased. Let's get a fantastic leader for the screen unit. Somebody who loves the industry, I mean what I'd like to see is somebody who just loves the industry from the ground up from education, audiences, loves filmmakers, that's what we need because that person who's going to be our leader is going to be the front facing person to the world. And we need them, you know, championing Scotland everywhere and going out and, you know, representing our producers, playing cupid to the world between Scotland and, you know, I hope, Netflix and Amazon and, you know, BBC, whoever it is, you know, that we just really need an engaging, intelligent, really charismatic, brilliant leader, so I hope you can find that person. Saddle, it's not our job. Does anyone else want to come in on that final point about Scottish Enterprise and the screen unit? I'll just make one sort of related point in that, exactly as Abel says in terms of the high-level corporate or commercial functionality and this being a timely moment. Blaise and Griffin have been experts in identifying routes to get different types of finance to develop the different aspects of their business model. There are, as you see, increasing innovation in things like VR and AR and the development, the cross-platform application of technology. So, for example, using a games engine and motion capture technology to use in a game but also in stage shows and also in feature films, et cetera. Those businesses, which hopefully more of which will develop within Scotland around studios and around larger company investment, they need to be supported in the most easy or most accessible way possible. Blaise and Griffin have done extremely well about finding the support from Scottish Enterprise and different aspects. At the moment, there is an understanding or a look into the way in which research and development, R&D tax credits, are understood and developed within the UK. There is a nest of paper by Hassan Bakshi looking at the redefinition of R&D so it can be applied in creative and cultural fields. That would be hugely important and impactful. If there is a way for the Government to be supportive of that and to look at these strategic interventions where rethinking of these models can come to pass, that would be linked to how Scottish Enterprise could perhaps stand support people in applying for those grants. At the moment, experts in the field are acknowledging that VR has not taken off as projected in terms of cash because there is not enough investment in the content. A lot of producers talk about the ability to develop content and to have a development producer on staff. That is really important to develop the whole business. Without the creative content, no one wants to put on a pair of VR goggles. You need that content, but you need to be able to finance that. If the barriers to finance are purely by definition of how R&D is understood, you have a problem there. Those are the kind of policy interventions that you guys can hopefully help with and ensure that the new screen unit is on top of. We will have to wind up there. I thank our second panel of witnesses. I will also spend briefly to allow the witnesses to leave the table. We have another item of business that we need to move on to quite quickly. Our second item of business today is consideration of legislative consent memorandum LCMS 515, lodged by Fiona Hyslop MSP, the Cabinet Secretary for Culture, Tourism and External Affairs. The committee has been designated as the lead committee in relation to this LCMS for the Holocaust return of cultural objects amendment bill. The purpose of the bill is to remove a sunset clause from the parent legislation, which is the Holocaust return of cultural objects act 2009. The effect of the parent legislation is to enable national institutions to transfer ownership of objects within their collections, where they are found to have been stolen during the Holocaust. Members are asked to consider whether to recommend that Parliament agree to a legislative consent motion, as outlined in the memorandum in relation to the Holocaust return of cultural objects amendment bill. To delegate to the convener in the clerk the production of a short factual report detailing the committee's consideration and arranging for its publication, are members content with this? I can now suspend the meeting and move on to private session.