Our investigation into the government’s Culture Recovery Fund has found evidence of automated cultural elitism.
Independent cinema is one of the UK’s largest exports. It contributed £11bn to the economy the year before the pandemic; more than agriculture. But cultural elitism, and a government algorithm, could spell disaster for an industry brought to a standstill by successive lockdowns and insufficient funding.
Early on in the pandemic, the BFI estimated that 95 per cent of independent cinemas could permanently close. After six months of tireless campaigning by cinema workers, the Chancellor announced a £1.5 billion funding package for culture and heritage, the Culture Recovery Fund (CRF). But for some, it was already too late. “By the time the funding was announced,” says Jason Wood, Creative Director of Film and Culture at HOME in Manchester, who have now received their funding, “many businesses had already gone to the wall.”
MPs also feared that the lack of support for freelancers and individuals in the industry might force them to food banks. As we previously highlighted, many of those working in the UK film industry are freelancers, juggling multiple jobs in order to sustain their main interest. Yet the government’s self-employment support scheme only covers work that provides 50 per cent or more of a person’s income, and so many people in the industry have been left out in the cold.
“They’ve got to invest in the grassroots industry,” says Sam Neophytou, who runs ArtHouse cinema in Crouch End, North London. For him, independent cinemas “aren’t just venues”. His staff are more important – they’re key to the industry going forward. “We’ve got actors, directors, filmmakers,” he says, who are working front of house at ArtHouse. “They are our future.”
Protecting the livelihoods of cinema workers is crucial to safeguarding the UK film industry as a whole. What little money is provided for independent cinemas, to cover the costs of Covid adjustments and loss of income, has still left venues scraping the barrel of their resources. Paul Vickery, Head of Programming at the Prince Charles Cinema in Central London, tells us that the owner of the cinema was “topping up” the pay of staff from 80 per cent provided by furlough, to the full amount, “from his own pocket”.
However, “If you let these places use their resources and slowly cut away the staff, what you return to won’t be what was there before,” Vickery says. “It’s like trying to rebuild a city after a war. Rebuilding from the rubble. But if we had support, we could come back better than before.”
But persistent delays have meant that, a year into the pandemic, only half of the CRF has been distributed. And what has been distributed suggests what Wood describes as “cultural elitism in this government”.
Funding for the Arts is already shockingly low – at the time of writing it stands at just 0.5 per cent of the government’s total Covid spending. The division of that money also raises concerns. The CRF is being overseen by a board of individuals invited to their roles, including Elisabeth Murdoch, Baroness Catherine Fall and Claire Whitaker, with no input from local councils.
The National Audit Office (NAO) has confirmed that “ministers, the Department and HM Treasury” decided the criteria for who would be awarded funding. This was defined as organisations that, pre-Covid, were “financially viable”, “culturally significant”, “essential to the fabric of a place” or were key in the government’s “levelling up agenda”.
“The film industry contributes hugely to the UK economy, and yet they treat it like a luxury,” says Wood. “They place a very high value on ballet and the opera, which are terrific, but they need to place more value on working class art forms, like cinema.”
“It is unrealistic to expect an algorithm to fairly define what is ‘culturally significant’ or intrinsic to the ‘fabric of a place’.”
We have learned that the BFI was given £44m to parcel out to approximately 800 independent cinemas registered in the UK, just shy of three per cent of the total CRF. The rest of the funding was handed over to Arts Council England (ACE), the National Lottery Heritage Fund and Historic England.
In our investigation into the CRF, we’ve found that seven opera houses and one touring opera company were awarded a total of £4.4m by ACE. This is equivalent to 10 times the amount of funding per institution than independent cinemas. Elsewhere, 42 independent cinemas have shared £650,000 of grant money, while Secret Group, the multi-million pound private equity firm behind Secret Cinema, was awarded almost £1m.
Additionally, almost half of the CRF has been assigned to heritage, including refurbishments to churches and disused prisons, as well as the sets for Downton Abbey and the Harry Potter films. Which is great news, until you remember that none of the funding has gone to the people actually making film or television.
The media has been inundated with positive feedback about the CRF, mainly due to the stipulation that those awarded are legally obligated to send out a press release under the banner #HereforCulture. What the industry really thinks is another matter.
“Whatever boots you need to kiss to get the money,” as Neophytou puts it. “That isn’t going to stop us being who we are. We’re independent, and we’re always going to be that.”
The loss of independent cinemas, and many other institutions across the UK which employ creatives, could be catastrophic for the industry: the next generation of Andrea Arnolds and Edgar Wrights may well be working front of house selling tickets and serving popcorn, and could be denied the opportunity to take their first proper steps into film and television.
But what is culture, anyway, and who gets to define it? At present, it’s those controlling the money – with the help of a computer algorithm.
We have found that ‘Spotlight’, an “automated due diligence tool” designed by Michael Gove’s Cabinet Office, was used to process thousands of grant applications of up to £3m. It seems to have excluded institutions valued by local communities in favour of those that fit the algorithm.
When reached out to for comment, the Cabinet Office declined to provide specific details, responding that they “do not put civil servants forward for interviews”. They told us that Spotlight was in beta testing before being rolled out “from March 2020”, and that “the tool complements existing checks and highlights areas of risk to inform grant-making decisions and risks that may require further investigation”.
The use of this tool brings into question who is deciding what “culturally significant organisations” are, and how that is being measured. For example, The Windmill in Brixton was rejected on the grounds that it was registered as a sole trader. On the other hand, Sundissential Ltd was a dormant company until it filed company accounts three days before the grant application deadline, and was awarded £223,822. ACE are investigating the case, while a further 44 incidents of fraud were reported as of January 2021. According to the National Audit Office, five awards have since been withdrawn.
We have also found companies awarded funding that would appear to muddy the definition of ‘culture’. This includes dozens of pubs and restaurants which host events. Cubana, a tapas bar and restaurant, hosts live music for diners and was awarded £119,000. This investigation has identified eight other pubs operating in the same vein that have been awarded close to £1.5m between them.
In addition, more than 60 events companies have received funding totalling £13m. Two corporate events companies, TH Collective and The Event Umbrella Ltd, also won funding. By contrast, the MAP (Music and Arts Production) charity in Leeds was awarded the minimum £50,000. The charity offers BTEC qualifications for children aged 11-16 who are unable to access mainstream school. Devas, a charity formed in 1884 providing opportunities to young people in the arts, was also awarded £50,000.
None of this implies improper or illegal activity on the parts of those who won funding. What it does highlight is that the criteria by which funding was supposed to be awarded seems to have been largely ignored. It is unrealistic to expect an algorithm to fairly define what is “culturally significant” or intrinsic to the “fabric of a place”.
“While the UK cinema industry is a large ecosystem, ultimately it is the people who create, produce, distribute and exhibit films that make the industry what it is.”
It’s important to note that the BFI did not use Spotlight. (Wood says that the BFI have been “brilliant throughout this process.”) Applicants were given a 12-week window in which to apply – significantly more than the two weeks assigned to other parts of the CRF – and the BFI then manually went through every application, even helping individual cinemas with their applications.
A spokesperson for the BFI told us that 77 per cent of the cinemas that applied received some funding, and 83 per cent of grant money went to cinemas outside of London. However, only £21m has so far been released, and none of it has gone to individuals or freelancers.
The BFI further commented: “The enormity of the situation for film and TV freelance workers came into focus quickly early last year which is why we set up the Covid-19 Emergency Fund for Film & TV with Film & TV Charity… how to better deal with it for the workforce is very much a live issue for us.”
According to them, the last quarter of 2020 saw an increase in indie productions with the help of the Film & TV Production Restart Scheme, with £0.5m provided by the government to cover insurance costs.
The future of cinema in the UK requires increased support in all regards. At the beginning of this year, prominent figures in the industry such as Steve McQueen and Christopher Nolan signed an open letter asking the government for more financial support for larger cinema chains that are responsible for 80 per cent of UK audiences and had missed out on funding.
While the UK cinema industry is a large ecosystem, ultimately it is the people who create, produce, distribute and exhibit the films we love that make the industry what it is. It is also individuals who are at the root of historic and persistent cultural elitism. In the next article in this series, we will take a forensic look at the people responsible for the distribution of government funding, and those standing to profit the most.
Published 7 Apr 2021
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