I am very pleased to have the opportunity to speak on the Second Stage of the Irish Film Board (Amendment) Bill, 2000, initiated in the Seanad, and I look forward to listening with interest to the views of the Senators.
It is a short Bill with a simple purpose. As is the general rule with statutory bodies which receive public funding, a ceiling is set by statute on the cumulative capital outlay, commitments and liabilities which the body may incur. This ceiling governs the allocation made to the body during the annual Estimates process. It is the means by which the Oireachtas ensures that the operations of such bodies will be reviewed in the Houses every four to five years.
Three years ago, I introduced the Irish Film Board Bill, 1997, to increase the ceiling from £15 million to £30 million. It is a measure of the greatly increased activity of the board in this quickly developing industry that this ceiling will be reached before the end of this year. This provides tangible evidence of strong Government commitment to the development of a vibrant film making sector. It is my firm intention to accelerate still further the pace of development by providing substantially increased resources for the board in the coming years. Accordingly, the Bill proposes to raise the ceiling on authorised issues from £30 million to £80 million – an increase of £50 million.
Recognising the growing importance of the creative audiovisual production sector for our cultural expression and economic prosperity, I established the Film Industry Strategic Review Group in 1998, under the chairmanship of Mr. Ossie Kilkenny, to review progress in the sector and make recommendations for its further development as we face into the early years of this new millennium.
The review group submitted its report in August 1999. It recommended a strengthened, broadened, restructured Bord Scannán na hÉireann to address the cultural and new strategic goals of the industry. The key focus areas for the board identified by the Kilkenny report in its recommendations were script development; development and production finance; strategic business development; generic marketing of Irish films, cinema going and video rentals and the marketing and promotion of Ireland as a film location; training and development; production expertise; technological policy, development and foresight and co-ordination with the television broadcasting sector.
Earlier this year, following Government approval of a strategic plan for the industry, closely based on the conclusions of the report, I instigated within my Department a review of the Irish Film Board to determine the resources of personnel, current funding and organisation required by the board to take on the expanded scope recommended for it in the strategy group report.
My Department engaged Olsberg SPI, in conjunction with BDO Simpson Xavier, to review the organisation and management of the board. They reported in August of this year, whereupon I invited Mr. Kilkenny, who had earlier been appointed by me to the position of chairman of the Irish Film Board, to draw up a plan of action based on the strategy review group's recommendations and taking into account the report of the management consultants.
The board is now finalising its plan which will take into account my comments here in the Seanad. I am confident that this plan will be soundly based. It will plot the course the board will follow over the next five years to deliver the driving force which will push the industry forward into a new and more mature phase of expansion, creativity and commerciality in this new decade.
Of necessity, in the first phase of development of the sector there was a particular emphasis on attracting substantial international productions to use Ireland as a location for their filming. Such productions play a very important role in sustaining the viability of the production infrastructure and developing the skills base because clearly, at this stage of its development, indigenous based production would not have been capable of sustaining the scale or volume of maturity necessary to underpin the infrastructure and skills which are essential to the industry.
While incoming productions will continue to form a vital element of our industry and will contribute to its further growth, the time is now ripe to look to a scaling up of our domestic production companies. To help in the achievement of this, the Government is fostering a favourable environment for long-term business planning and investment in the industry.
During the 1990s the task was to build a film production infrastructure here in Ireland, an infrastructure of skills, facilities and creative talent. Starting from a very low base of production at the beginning of the 1990s, Ireland now has the highest per capita output of feature films in the European Union, and ranks fourth internationally in attracting inward investment for film production.
What, then, is lacking? The creative audiovisual content sector is undergoing a period of rapid change and developments in response to the advent and ongoing application of digital technologies. To become effective players in the evolving digital marketplace, while continuing to gain strength in the enduring media of cinema and television, companies here in Ireland will need to grow and consolidate. With our pool of increasingly experienced and self-confident talent, the time has come for an increased measure of business discipline and planning. Indeed, the "flowering of our culture" in the audiovisual media during this new decade will depend on the emergence of strong, creative, strategically managed companies which can build and attract the capital resources to develop and produce slates of projects, including long running television series, which will appeal to global markets.
In the digital age, it is now widely recognised that "content is king", that quality audiovisual content is crucial for competitiveness. Supporting the development of creative skills and production capability is a vital counterpoint to the development of the digital technology and telecommunications industry in Ireland and on the promotion of Ireland abroad.
Audiovisual production is the most powerful means of bringing Irish culture and creativity to global audiences, generating an awareness of and interest in Ireland and our culture. This is of particular importance for a country such as ours, which has a vast international diaspora, generating a worldwide sense of Irish cultural identity. It is also a key complement to our international trade promotion and marketing of Ireland and our development of businesses based on intellectual property, an important element in the modern world economy.
It is noteworthy that all EU countries recognise the importance of this sector by strongly supporting their audiovisual production sector. Indeed, the EU Commission recognises the special cultural significance of creative audiovisual production, and in its state aid rules allows more generous support to this sector than to other industrial sectors.
The Government's position, therefore, is that the audiovisual production industry is to be assigned a central place in Ireland's industrial policy through co-ordinated commitment by the industrial agencies of the State in conjunction with the Irish Film Board to the development of the industry and, in particular, to fostering strong indigenous companies in this sector. We are entering a new phase of opportunity and potential for this increasingly important sector with a diversification of the distribution channels, the potential for the emergence of global niche markets and increased competition to win audiences. While all this comes within the statutory scope of the Film Board Acts, 1980 to 1997, which legislation was broadly and comprehensively drafted, it nonetheless represents a major new direction for the board's operations. The board's five year plan, Strategy and Structure 2001-2005, sets out clearly how the board proposes to respond to this challenge.
A key role of the board in fostering an environment for growth will be to bring together and act as a facilitator to optimise the impact of all the agencies of the State which make inputs into the development of this sector. Now that a clear Government endorsed strategic plan is in place, it is important to ensure that all relevant resources of the State operate in concert to achieve the realisation of that plan. This will require liaison at top executive level in the organisations concerned to co-ordinate support for the sector.
Beyond this, there will be significant changes in the board's emphasis. First, there will be increased commitment to enhancing the development process. Development is a critical phase in which many of the key creative and business decisions must be taken, decisions which will in great measure determine the market potential of the project. The board will be striving, through financial support for development, to encourage companies to develop beyond the "subsistence" mode of operation where, at any given time, they have only one project on hand whether at the development, production or market phase. What is needed, and what the board plans to support out of its enhanced financial allocation, is companies to develop slates of projects – usually three to five projects – so that development as well as production becomes an ongoing function. The board's crucial role in nurturing new talent and creative originality will mean that support for the development of individual projects will continue to be an important component of its development loans scheme.
There will also be closer integration of training in script writing and the development of scripts with the development support which will be provided by the board. This will increase our capacity to produce excellent scripts which can appeal to the international markets upon which our indigenous industry is ultimately dependent.
This leads me to the second change of emphasis which will take place in the board's policies. The board will place greater emphasis on the commercial potential of the projects which it supports, seeing them as the basis for helping businesses to grow and their potential to contribute to the achievement of the company's business plan. Our capacity to develop and express our culture and creativity in the audiovisual media is dependent upon our doing so in a way that can appeal to wider audiences. Audiovisual production is highly capital intensive and, therefore, must have regard to the market. State aids, such as section 481 and the Irish Film Board schemes, are intended to facilitate growth and consolidation of companies and the parallel development of a pool of professional business and production skills. If they operate merely to enable the perpetual extension of a subsistence mode of production, these resources are being dissipated and there is ultimately no value added in terms of company or industry growth.
Every company which applies for support from the board should have a strategic business plan. This does not mean that only larger companies can prosper in this industry but that every company should have properly thought through what goals it seeks to achieve, what partners it needs to achieve these goals and the timeframe for their achievement. Practical advice and assistance can be organised to help companies to develop their strategic thinking and plans.
At this point I wish to refer to the important issue of funding to support the training needs of the film and television production sector. Up to the end of 1999, the European Social Fund co-funded the operations of Screen Training Ireland to the tune of 75%, the balance of 25% being provided by the Irish Film Board. Screen Training Ireland operates under the aegis of FÁS which itself supplemented the overall figure from its own training resources. Now, however, the ESF funding is no longer available for film training.
In these circumstances, I have provided additional resources to the Irish Film Board to ensure the continuation of the vital training inputs necessary for the development and expansion of the industry. This also constitutes capital expenditure by the board. In providing these funds for training to Screen Training Ireland and, in accordance with my strategic policy for the industry, I expect the Irish Film Board to ensure, in close liaison with FÁS, that the training being delivered is consistent with the strategic needs of the industry.
I will deal now with the question of how the Screen Commission function of the board will operate within the new strengthened board. The Screen Commission of Ireland became operational in 1998 as soon as funding became available through approval by the EU Commission for the reinvestment of a portion of the Irish Film Board's recoupment of its loans in the funding of the Screen Commisison. It was set up on a pilot basis under the direction of a voluntary panel of industry experts. To give the commission a statutory basis for its business it was constituted as a statutory committee of the Irish Film Board.
The original conception and remit of the Screen Commission was that it would operate with a high degree of independence from the Irish Film Board and it established a separate identity, executive and office. At that time it was felt that the functions of the Screen Commission did not overlap with those of the Irish Film Board and needed to be discrete and distinct from the board's established functions. Whereas the film board's focus was on the fostering of indigenous projects and talent, the focus of the Screen Com mission was seen as being to bring mobile international projects to Ireland.
The Screen Commission tackled this brief with commendable professionalism and enthusiasm. Ireland was represented by the commission at the major locations, expositions and principal film markets in Europe and north America and, in addition, participated with Irish producers in trade missions to Australia and Canada. Through Irish participation in these events, several projects either came to Ireland or seriously considered Ireland as a location and business contacts were established.
However, in light of the film industry strategic review group's report, which recommends an enhanced central co-ordinating role for the film board, and the recommendation of the consultants' report on the organisation of the extended film board, it is now rational that strategically the Screen Commission function should be co-ordinated under the film board itself. Furthermore, the distinction originally envisaged between indigenous and incoming productions is much less clear in practice than in theory, particularly in the case of co-productions involving a substantial Irish financial and management input into the project, as is the case in many European co-productions. This year Ireland ratified the European Convention on Cinematographic Co-production and already there are several co-productions in the pipeline for Ireland under the convention.
Accordingly, it has now been decided to reposition the Screen Commission function. It is envisaged that the chief executive of the Screen Commission will now report directly to the board and will work in close liaison and co-ordination with the Bord Scannán team. I have no doubt that the board will give careful consideration to the question of how best to build on the brand identity, connections and goodwill which have been built up by the Screen Commission so that these can be exploited to the full in achieving the board's overall strategic objectives.
I greatly appreciate the expertise, commitment and considerable time that the members of the Screen Commission have given to their task. Their knowledge of the industry and their prestige has enabled the pilot period of the commission's operation to be an important learning experience and a fruitful one. The Irish film industry has reason to be grateful for the exceptional commitment of those who give so generously of their time in the various boards, panels, professional associations, committees and policy groups which have steered and guided Ireland's maturing industry since the start of the 1990s. I have benefited from their generous and comprehensive advice in formulating Government policy for the industry. Without the benefit of the Screen Commission's expertise and the experience gained over the past three years, it would have been much more difficult to establish an effective screen commission function within the board.
I am aware that internationally there are many Irish people, people of Irish descent and friends of Ireland who occupy positions of eminence and influence in this industry, including members of the outgoing Screen Commission, who would be not only willing but delighted to help us in achieving the goals we have set ourselves. I have been considering how we might avail of this pool of goodwill, and this is a matter I intend to explore with the Irish Film Board.
To return to the specific topic of the Bill, I envisage that it will lay the financial foundation for the next phase in the development of the film industry in Ireland. I have outlined to Senators the extended role of the board in building upon what has already been achieved. Because of the increased expenditure of the board in recent years I wish to point out that the Bill is urgent to enable the board draw down funds for films which will be going into production in the coming months.
In addition to the Exchequer allocation to the board, which is voted annually in the Vote for my Department, the board is also authorised to use recoupment of its loans under its schemes. Repayment is conditional on certain commercial targets being reached by a film and I envisage that the reinvestment of such recoupments will continue to play an important part in enhancing the board's support for the industry. Of its nature the board is not a commercial bank and one of its principal functions is precisely to provide finance on terms which cannot be offered by the commercial banking sector. However, as the industry matures, it might be expected that the current recoupment rate of 13% should improve, providing additional resources for reinvestment in the industry. Reinvestment of recoupments and further development of production loans adds to the cumulative capital outlay of the board and, accordingly, is reckonable for the purposes of the legislation ceiling set by the Oireachtas in the Film Board Acts.
There are two issues which have arisen in the course of my review of the Irish Film Board on which I feel I should make my position clear. First, the question of a change in the name of the board was raised. I am opposed to this. It would require statutory change and would suggest a break in the continuity of our film policy. I consider that the current title of the board, in Irish and in English, makes it clear that it is the State agency with ultimate responsibility for the implementation of Government policy on film. The second point relates to the location of the board. It has been suggested that the board should be entirely based in Dublin. Senators will be aware of the importance given by the Government to decentralisation. I do not envisage the board's headquarters moving from Galway. However, I agree with the board's approach in establishing an office in Dublin and it will be a matter for the board to decide how it should organise its work between Galway and the rest of the country.
I appreciate the co-operation of Senators in expediting enactment of this very short but crucial Bill. There are already a number of imminent film productions awaiting passage of the Bill to receive support from the board and I again thank the House for facilitating passage of the Bill.