10/03/2011

The UK’s spending watchdog, the National Audit Office (NAO), has criticised the country’s apex culture body, the Department of Culture, Media and Sports' (DCMS) step of terminating some arts organisations, especially the UK Film Council (UKFC), without adequate financial analysis.

In July 2010, the DCMS decision to axe the UKFC had sent shockwaves across the British film industry. The Culture Secretary, Jeremy Hunt, had then said that the £3m annual administrative costs of the UKFC would be better spent in making films. On April 1, the UKFC’s film financing functions will be transferred to the British Film Institute and the office of British Film Commissioner will be held by Film London, which will also be in charge of inward investment in film.

NAO head Amyas Morse said, “Some decisions have been made based on insufficient financial information and analysis, as exemplified by the decisions to merge and close some arm’s-length bodies.”

The NAO report stated, “The Department announced the closure of UKFC in July 2010, but it had not performed sufficient analysis of the financial implications of the decision. It announced the transfer of functions four months later, but still had no formal arrangements in place as to which UKFC staff would transfer to other bodies. It had also not calculated the expected costs of closure, although it had decided the transfer of functions would take place on 1 April 2011.”

The UKFC will cease to exist from July 1, but the winding down costs of the operation will be £11.3m.

The DCMS said in response, “We had consulted extensively over the summer with our bodies, which meant that we could take swift and informed decisions immediately after the settlement.”