Delivery options for production space for film and TV

This report presents the findings of an option appraisal study commissioned by Scottish Enterprise (SE), in partnership with Creative Scotland (CS) and the Scottish Government (SG), into the development of a new film and TV production facility in Scotland. Several potential options were assessed, including: further expansion of the Wardpark facility in Cumbernauld; three full scale new build proposals at Dalmarnock, Gartcosh and Pacific Quay; and a Foundation Studio, as an example of a first phase development only, comprising two soundstages, two workshops and production offices but excluding non-essential (albeit desirable) accommodation for facilities companies and other non-core activities.

The methodology consisted of desk review of available market information, wide consultation with stakeholders and a selection of key industry representatives, site visits, outline designs and layouts for each of the sites selected for appraisal and close working with SE and its partners.

The study found evidence of a clear and present opportunity for a studio facility in Scotland, based on strong growth in internationally mobile film and TV production activity. In particular, the extension by the UK Government of tax incentives for mobile production from film into TV and video games (subject to State Aids approval) has created a surge of interest from international (mainly US) TV productions. This, combined with ongoing growth in demand for filmed content generally, is driving demand for studio space, currently scarce within the UK and many parts of Europe. The current lack of any dedicated film and TV studio is a barrier to Scotland competing in this market. However, the findings suggest a studio alone will not be sufficient. In terms of location, it was proposed that any studio should be located near to the main transport links, crew and facilities companies, suggesting the Central Belt tending towards the major concentration of skills in the Glasgow area. Outline design and site appraisal work identified the likely costs of a new build studio to be between £15m (for the Foundation Studio) and £74m (Gartcosh site) (including fees and VAT), but found little to differentiate between the sites. However, while the commercial appraisal on both the full scale and first phase only options found potential to generate operating profits, these would be insufficient to repay the necessary capital investment, making the project less attractive to a commercial investor without substantial public capital support. The appraisal found that the Foundation Studio option offers the most practical case for public sector support on the grounds of economic impact and value for money. It presents a more affordable solution, could be developed in a shorter period of time and would enable Scotland to engage in the current market opportunity on a lower risk basis but at the same time allowing for managed growth and expansion in time.

On the basis that there is a clear market opportunity for a studio in Scotland, a number of recommendations were made regarding next steps. These included: SE (on behalf of the three partners) should issue a brief to the market to identify any private sector interest in a studio development that would meet the identified market opportunity for Scotland; in the event that a) the market testing process does not identify a commercial project and b) the case can be made for public sector investment, the partners should proceed with detailed appraisal and business planning for a Foundation Studio; in seeking to clarify the case for public sector involvement, the partners (including SE, CS and SG) should seek detailed advice on the State Aid position to clarify what can be delivered within the State Aid envelope; and should a robust business case be made for public sector involvement, the partners should also examine the availability of capital funding, and seek the necessary approvals, making use of the evidence presented within this report.