Save The Arts: Screen search for City's silver

The creative industries: We've had Britpop, now it's Britfilm. Dana Rubin profiles Parallel Pictures, while Dawn Hayes looks at funding

THE City of London is examining how to increase investment in the international independent film industry for the first time since banks took fright at the near collapse of Goldcrest Films in 1986.

The Corporation of London, which represents the London financial markets, is backing a study that will look at what is needed to encourage the financial markets to invest in the resurgence of the British film industry.

It will publish a report in May designed to give investors a clearer structure against which to assess risk and returns for the industry's thousands of small companies, which nevertheless manage some two-thirds of all film revenues outside the US.

The Corporation's move comes amid a ground swell of support for the industry, including government tax breaks and Lottery funding, to sustain its renaissance in global markets with films such as The Full Monty. Last year, 23 per cent of all UK box office revenues went to British films, compared with an average of 8 per cent in previous years. And cinema attendances have grown rapidly.

"There is a much more lucrative opportunity to earn back film production costs now with opportunities worldwide for revenue growth in pay-TV, video and admissions," said Stewart Till, a president at Polygram Filmed Entertainment. He said film would command higher revenues as pay-TV developed around the world.

"What's now been proved is that the two forms of entertainment consumers will pay for on TV are movies and top sports - the beauty of film is that it has a longer life than sport with cinema, video, network TV and pay- TV," said Mr Till.

Last year, pounds 558m was spent on UK-linked films, including films made by British producers or shot in Britain, according to the film magazine Screen Finance. That is down from pounds 726m in 1996, but up on the pounds 421m spent in 1995 and pounds 436m in 1994.

The Corporation's move comes as a government-appointed committee, the Film Policy Review Group, is expected to announce a list of recommendations on 26 March, including the introduction of a permanent body staffed by film and financial executives that would act as a point of contact between the two industries.

London has become the centre of film distribution and financing outside the Hollywood system over the last 15 years, said Adam Page, chief executive of The Ottowa Consulting Group, an independent media consultancy commissioned by the Corporation of London to carry out the study.

"Providers of capital have no basis on which to formulate expectations of risk and return, unlike other industrial sectors," said Mr Page. "We'll be looking at what practical steps need to be taken towards encouraging a healthy capital market for the international independent film industry, so much of which operates out of the UK."

UK film exports in 1996 outstripped film imports, leaving a surplus of pounds 91m. That compares with a deficit of pounds 10m in 1995. Production spend on UK films soared to pounds 558m in 1997 from pounds 105m in 1989.

Last year, the Government appointed a film minister for the first time. It introduced tax benefits so that companies can write off 100 per cent of their finance against profit in the first year, and helped producers to secure funding by allowing the Lottery to award pounds 43m to British films and pounds 96m to three new film franchises.