A letter sent 6 March 2024 from the Rt Hon Lucy Frazer KC MP – Secretary of State for Culture, Media and Sport, to Creative UK CEO, Caroline Norbury OBE.
Dear Caroline,
I wanted to share a summary of the announcements made today in the Spring Budget, which I am delighted to say includes a number of measures in support of the creative industries. As you will know, since 2010, HM Government has deployed a range of tax reliefs and investments to maximise the potential of these sectors.
Production studios are a key pillar of the UK’s film industry, driving local economic growth and jobs as well as attracting significant international investment. The Chancellor and I have been listening carefully to the sector’s concerns about the new business rates valuations, and their potential impact on the industry. I am therefore glad to share that the Government is taking action to support eligible film studios across the country, with a new relief scheme of 40% until 2034. This will apply equally to both existing studios, and studios in development, ensuring the UK remains a leading destination to make and invest in film.
Competitive tax reliefs play a fundamental role in supporting our creative and cultural ecosystem. A new UK Independent Film Tax Credit will be introduced for independent films made in the UK from April 2024, in recognition of their role as the grassroots of our domestic screen industries, as well as their ability to showcase British creative talent on the world stage. Films with budgets up to £15 million will be eligible for an increased benefit of 53% through the Audio-Visual Expenditure Credit, which could increase spending on indie films by an estimated £70 million before 2032.
Following the call for evidence last year, the government will be introducing a 5% increase in tax relief for UK visual effects costs in film and high-end television under the current Audio-Visual Expenditure Credit system, and removing the 80% cap for UK visual effects expenditure. These measures are in recognition of the opportunity to make the UK the number one destination for visual effects.This boosted tax benefit will incentivise more productions to draw on the UK’s post-production expertise, potentially generating hundreds of millions of pounds in additional revenues and creating thousands of jobs.
Today the Chancellor of the Exchequer has announced permanent higher rates of Theatres (TTR), Orchestras (OTR) and Museums & Galleries Exhibition (MGETR) Tax Reliefs. From 1 April 2025, these rates will be permanently set at 40% (for non-touring productions) and 45% (for touring productions) rates of the Theatre Tax Relief (TTR) and Museums and Galleries Exhibitions (MGETR) Tax Relief, and a 45% rate for Orchestra Tax Relief (OTR). The sunset clause for Museums and Galleries Exhibitions Tax Relief will therefore be removed. This is an incredible opportunity to continue to boost inward investment into our world-class cultural sectors.
The Government is also providing £26.4 million funding to the National Theatre for urgent infrastructure improvements, in recognition of its central role in our country’s cultural ecosystem. This support will ensure that the National Theatre can continue to deliver world-class theatre productions, work across the nation and grow the UK’s cultural reputation overseas. The Government also recognises the significant capital needs across the wider cultural sector. A research project will provide a robust evidence base about the capital needs across the arts and heritage sectors, and I hope you will continue to engage with my Department on this important work.
The Chancellor announced funding (subject to a business case) to support an extension to the National Film and Television School. The School is one of our world-leading institutions providing post-graduate education and career development to Britain’s top creative talent. This funding will help the school grow. their course provision, introducing new courses and developing research and development at the forefront of emerging fields such as games, virtual and real-time production, and artificial intelligence. The National Film and Television School will also build a state-of-the-art training centre, dedicated to accelerating the growth of apprenticeship provision to the film, TV, and games industry, allowing them to offer up to 200 new apprenticeship places per year.
The Government is also supporting the creative industries to achieve our levelling up commitments. The Chancellor has announced the creation of an Investment Zone in the Tees Valley focused on digital and creative sectors. Local partners expect it to leverage £175 million in private investment and help to support over 2,000 jobs over the next ten years. Additionally, across the country, the creative industries will also be able to benefit from a new Investment Opportunity Fund that will provide funding of between £1 million and £25 million for projects driving investment into existing Investment Zones and Freeports in the government’s priority growth sectors. The Budget also announced the allocation of £100 million of funding for culture projects through the Levelling Up Fund and £10 million for culture and heritage projects in the West Midlands.
I hope you are as delighted by these positive announcements as I am. I am determined to grow the creative industries by £50 billion and deliver one million more jobs before 2030, which I set out in the Creative Industries Sector Vision in 2023. The Spring Budget announcements build on the announcements made during the Autumn Statement and demonstrate the Government’s commitment to this world-leading sector.
I want to thank you personally for your invaluable contribution and your constructive engagement with the Department. I look forward to speaking at your Creative UK Summit this evening. I would encourage you to share this letter with your staff and members for information. I look forward to continuing to work with you to achieve our ambitions for the creative industries.
Yours sincerely,
Rt Hon Lucy Frazer KC MP
Secretary of State for Culture, Media and Sport