NATIONAL AUDIT OFFICE

REPORTBY THE COMPTROLLERAND AUDITOR GENERAL

The British Film Institute

ORDEREDBY THE HOUSEOF COMMONS TO BE PRINTED 28 JANUARY 1994

LONDON: HMSO 178 f8.15 NET THE BRlTlSH FILM INSTIT”TE

This report has been prepared under Section 6 of the National Audit Act 1983 for presentation to the House of Commons in accordance with Section 9 of the Act.

John Bourn National Audit Office Comptroller and Auditor General 13 January 1994

The Comptroller and Auditor General is the head of the National Audit Office employing some 800 staff. He, and the NAO, are totally independent of Government. He certifies the accounts of all Government departments and a wide range of other public sector bodies; and he has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and other bodies have used their resources. THEBRITISHFILMINSTITUTE

Contents

Pages

Summary and conclusions 1

Part 1: Introduction 6

Part 2: Sponsorship by the Department of National Heritage and financial management at the Institute 7

Part 3: The National Film Theatre, Film Festivals and the Museum of the Moving Image 12

Part 4: The National Film and Television Archive 21

Part 5: Widening access through regional support 26

Appendices

1. British Film Institute performance measures (as shown in DNH Annual Report, 1993) 29

2. Abstract British Film Institute financial statments 1992-93 30

3. Main funding relationships for support in the regions 1992-93 31

4. Directly funded Regional Film Theatres -Funding sources and performance 1992-93 32

5. Institute Services to Regional Film Theatres -Findings of a survey by the National Audit Office 33 THE BRITISH FILM INSTITUTE

Summary and conclusions

Introduction 1 The British Film Institute provide a wide range of facilities to encourage the development and appreciation of the art of film and television in the United Kingdom. Their activities include the National Film and Television Archive; the National Film Theatre; the Museum of the Moving Image; the London Film Festival and other film festivals: the production and distribution of film and video; Research and Education; a Research Library and Information Service; and funding and other support for film and activities undertaken by regional and other bodies. They received El5 million grant-in-aid from the Department of National Heritage in 1992-93 and generated El0 million of income.

2 Against a background of reductions in budgets and staff members at the Institute and lower than expected income from their trading operations, the National Audit Office study focused upon sponsorship by the Department and financial management arrangements; the operation of the National Film Theatre, the Film Festivals and the Museum of the Moving Image; the operation of the National Film and Television Archive; and measures designed to widen access through regional support.

On Sponsorship by the Department and financial management at the Institute (Part 2)

3 The planning process is the fundamental mechanism for accountability to the Department and for assurance as to value for money from the grant given. The Department receive and analyse the Institute’s Corporate and Business Plans, their annual accounts, forecasts and financial information. From their detailed analysis of the Institute’s latest Corporate Plan the Department concluded that, whilst it provides good overall coverage, they will be suggesting, for discussion in 1994, a number of ways in which future plans might be developed. These include a closer articulation of Divisional plans, targets and budgets with the core aims of the Institute; and details of staffing levels. The Department consider that the Institute have made substantial efforts to produce performance indicators and they wish to encourage them to find additional reliable measures which will help demonstrate how far they are meeting their overall aims and the extent of improvements in value for money.

4 The work of the Board of Governors is crucial to the success of any sponsored body. In the case of the Institute the quality of papers for the Board was high in almost all cases, as were the demonstrations of the commitment and contribution of the individual governors. Two members of the Department attend meetings of the Board of Governors of the Institute.

5 The Institute’s senior management have progressively sought to introduce more realistic forecasting and budget setting and improved financial monitoring. In 1992-93 trading income was El.3 million below forecast and there were some expenditure overruns albeit much less significant than the

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income shortfall and not calling for special attention beyond tighter budgetary control. This financial outturn represented a serious problem for the Institute which they were able to cover by recourse to sources of private funds.

6 More cautious income forecasts for 1993-94 and beyond, lower than expected funding from the Department and thus the need to contain costs, have led the Institute to review fundamentally their financial position. They have made staff cuts, reduced capital expenditure and deferred grants. Their financial management information systems are basically sound but there is less than full awareness of the imperatives of good financial control in some areas of the Institute. Consequently, continuation of the active Finance Department policing of budgets and senior management’s close attention, together with realism on the part of all budget holders in 1993-94 and beyond, is vital to future viability.

On the National Film Theatre, Film Festivals and the Museum of the Moving Image (Part 3)

7 The overall progressive and continuing decline in attendance levels at the National Film Theatre is in part a reflection of falling membership levels and represents a threat to future financial viability. There are many contributory factors to this decline, some of which are to do with the physical environment at the Southbank. The overall programming policy of showing large numbers of different films, many short seasons and no long runs of particular films, had remained broadly unchanged in recent years until late 1993. Programming decisions were not significantly influenced by forecast income levels or past attendance levels. In 1993 management, including the new head of the Southbank, took firm action to strengthen and improve liaison between programming and marketing and to revise some elements of their programming to improve attendance levels.

8 The Institute made major changes in management at the Southbank in 1992-93 and introduced cost saving measures including staff restructuring. They also improved financial control. A new box office system, attention to services to annual members, marketing efforts and other measures should help attendance levels. But if they do not pick up significantly the Institute will have to take difficult decisions if they are to sustain the current levels of operations without ever increasing subsidies. The Institute set up a Governors’ sub-committee in the summer of 1993 to conduct a fundamental review of Theatre activities including programme planning and medium term options.

9 For the London Film Festival - an area of audience growth -budgetary planning, monitoring and control need to be enhanced if net subsidy overruns (E108,OOO or 42 per cent in 1992-93) are to be avoided in future. The Institute have improved the management arrangements for 1993-94. The National Audit Office considered that a staff member dedicated to providing financial advice and support to the Festival Director might be needed and might focus upon detailed and frequent monitoring. The Institute put this into place in Autumn 1993. The National Audit Office consider that the Institute need to operate to a clear film festival plan which contains break points for senior management review and options to be considered if planned income levels are not achieved.

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10 The Museum of the Moving Image face particular challenges since they charge for admission and, unlike many museums, receive no subsidy from the public purse. Audience levels are in decline for reasons including the recession and being away from the tourist mainstream. The audience levels have declined from 536,000 to 368,000 in the last three years and now stand at around half the level needed to break even financially. This decline represents a threat to financial viability. The Institute’s review of the Museum’s future needs to view realistically the longer term calls on Institute financial resources and their capacity to sustain them.

11 The Museum give high priority to marketing and, having learned lessons from experiences in 1992-93, they developed a new marketing strategy in 1993. They need to monitor these new marketing initiatives closely and evaluate their impacts.

12 Properly functioning equipment is critical to the Museum and failures have not so far affected the quality of service to visitors. But the Museum forecast of essential equipment maintenance, repair and replacement costs in the years to 1995 greatly exceed budgeted allocations. They therefore need to take a realistic and careful view of equipment lifetimes and budget accordingly, making better use of asset accounting systems.

13 Southbank Retail and Catering Services have underperformed against financial targets and the retail spend by visitors has fallen. The financial projections for catering at 30 June 1993 were well below original income forecasts and management have resolved to remedy the situation before April 1994.

On the National Film and Television Archive (Part 4)

14 The Archive hold some 275,000 titles and are expanding the collection by acquisition or donation wherever possible and appropriate and by recording television programmes. Preservation of decomposing old film, especially nitrate based film, presents an enormous challenge. From 1895 to about 1951 most film was produced on a cellulose nitrate base which is highly inflammable, and deteriorates irreversibly through chemical decay. At current rates of throughput, the preservation programme for nitrate film may well take 60 years to complete compared with the 24 years originally planned in 1976. Although the Institute intend to increase the amount of preservation work, some film will inevitably deteriorate and be lost before it can be preserved.

15 The Archive recognise that not all films merit preservation. The physical condition of each film, its cultural importance and demand for it, dictate preservation priorities. The former factor predominates at present. The Institute have detailed data on volumes and conditions of different types of film holdings. The data could be used more positively to track increases in unstable film, to predict loss by deterioration and to estimate future processing requirements.

16 The Archive have a remit to make the collection as accessible as possible and they make copies of master material for use as viewing copies. However, only 22 per cent of film material in the Archive is available as

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viewing copies, which, while this represents some 30,000 titles is a concern to the Institute.

17 The Institute do not intend their Viewing Service to provide major income streams and their charges are low to encourage use by students and researchers, while deterring casual viewing by a modest charge. Also, too high a charge might possibly deter potential donations of material. The main viewing charge was increased from f7 to El0 per hour in 1993. The Production Library, which supplies extracts from the collection to commercial users, mainly television, generates appreciable income. Charges for copying film and search fees -which have only been increased once since 1983 -are at the lower end of the range of comparable charges levied by commercial libraries (which unlike the Archive, own the rights in their material) such as Reuters and Thames Television. And in contrast to other organisations, the Institute do not levy additional charges for certain services. In 1993 the Institute started a review of these charges.

18 Within the restrictions on copyright, the Archive have made some modest amounts of money from direct use of the collection. But they do not have a clear business strategy to seek to maximise income. An improved revenue stream from the use of the collection would assist them to fund their preservation work.

On widening access through regional support (Part 5)

19 The Institute support bodies throughout the UK including 46 Regional Film Theatres. This is in keeping with the Department’s emphasis upon widening access and within the broad strategic aims articulated by the Institute. They have not translated these aims into working level objectives which could be used to compare the impacts of regional support provided. However, the National Audit Office recognise that derivation of such objectives is very demanding and difficult. The Institute make grants of about E3 million annually. In addition, they incur staff support costs of about Z!~%O,OOOon regional activities but these costs are not formally linked to the service they support. Achievements from funding clients directly or via the Regional Arts Boards are difficult to assess. But some performance indicators have been developed and the Institute are piloting some in 1993. They hope to move to a funding system based more on quasi-contractual arrangements or service level agreements either of which will demand clearer performance measures.

20 The National Audit Office survey of Regional Film Theatres indicated a generally favourable view of the Institute’s services. Respondents rated particularly highly the programme related services, publicity services and programme documentation. But they sought more assistance from the Institute by way of marketing information including feedback on sector performance and trends. Three quarters of respondents would have liked more opportunities to show in their regions the films previously screened at the Southbank.

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Overall 21 The Institute provide a wide range of important and well respected cultural conclusion services and facilities in relation to film. Many of the staff are nationally or internationally recognised experts and the National Audit Office were impressed by the dedication, commitment and enthusiasm of the Institute’s staff in general. The range of activities within a body of their size, pose the Institute many challenges at the same time as offering scope for interesting cross-fertilisation and cultural synergies. In 1992-93 the grant of El5 million from the Department was lower than the Institute expected and their trading income was much lower than forecast mainly because of reduced audiences. There is continuing decline in attendance levels at the National Film Theatre and at the Museum of the Moving Image. Attendance at the latter is now around half the level needed for it to break even financially. The London Film Festival required more financial support in 1992-93 than was expected. These problems are in the main a reflection of the Institute’s operation in a commercial environment during the recession. The accumulated backlog of film preservation work at the National Film and Television Archive represents an enormous challenge which is currently manageable only because of the excellent storage facilities the Institute have been able to fund independently of government grant.

22 Budgetary control within the Institute had historically been weak with many improvements in recent years, but some budgets were overspent in 1992-93. Not all parts of the Institute have necessarily afforded budgetary control priority and prominence on a par with the pursuit of cultural objectives. Senior management’s continuing attention to budgets and active Finance Department policing of budgets remains important. Some f5.4 million of the Institute’s Major Projects Fund was used in 1992-93 to finance capital and special projects and to support the operating deficit at the Museum of the Moving Image. However, the Institute had only limited plans to draw on the Fund in 1993-94, and hoped to receive additional private donations in that year.

23 The Institute’s Board of Governors and senior management fully appreciate the financial and managerial challenges they face. They have taken strong action, including staff cuts and reducing capital expenditure, to see that the 1993-94 operating deficits are within available resources. They have also reinforced the budgetary control regime and have enhanced central monitoring and support to budget-holders.

24 Against this background, the Institute have recognised that penetrating reviews of all of their activities are necessary, including difficult effectiveness issues such as cultural impact. Work on these reviews started in 1992 and needs to be carried through with a greater measure of urgency. These will inevitably lead to difficult and painful decisions if the future operation of services and facilities are to be safeguarded and cultural impact maximised. Marketing strategies need to be developed for more of the Institute’s activities, and across the Institute, to help increase demand, maximise income and to anticipate kinder trading circumstances in future years.

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Part 1: Introduction

1.1 The British Film Institute (the Institute) 1.4 The Department of National Heritage (the provide a wide range of cultural services and Department) grant to the Institute (El5 million facilities. These include the National Film in 1992-93) is not earmarked for specific Theatre and the Museum of the Moving Image services or activities. In 1992-93, the Institute on the Southbank, the National Film and generated income of about El0 million from Television Archive at Berkhamsted, a research the National Film Theatre, the Museum of the library and information services, a wide range Moving Image, sponsorship. donations and of education services, an extensive film fees from many services and from membership distribution catalogue and their own film subscriptions. Appendix 1 shows the range production facility for low budget feature and volume of activities as reflected in the films and shorts. They organise the London performance indicators reported to the Film, and other festivals, and make annual Department. awards for the achievements of British film makers and others involved in the film 1.5 Following the announcement by the industry. They also provide direct and Department in late 1992 of the levels of grant indirect funding and support in the regions in and lower than expected income from trading partnership with Regional Arts Boards, local activities, particularly at the Southbank, the authorities and others. This work includes Institute projected deficits in 1993-94 and programming advice, a booking service and 1994-95 equivalent to about ten per cent and funding for a network of independent regional six per cent respectively of net expenditure film theatres. needed to sustain activities at existing levels. Substantial cuts, including some 40 posts or 8 1.2 The Institute’s Royal Charter states their aims per cent of their 500 or so staff, were therefore as “to encourage the development of the art of necessary in order to balance the budget. film in the United Kingdom, promote its use as a record of contemporary life and manners; foster study and appreciation of it from these Study scope points of view; foster study and appreciation of films for television and television 1.6 Against this background the National Audit programmes generally: and encourage the best Office study focused on the following: use of television in the United Kingdom”. . Sponsorship by the Department and 1.3 The Institute have many international financial management arrangements, counterparts for particular activities and are held in very high regard by them. However, l The operations of the National Film none cover the full range of activities, each Theatre, Film Festivals and the Museum being constituted, funded, and supported very of the Moving Image, differently. . The operation of the National Film and Television Archive, . Measures designed to widen access through regional support. THE BRITISH FILM INSTITUTE

Part 2: Sponsorship by the Department of National Heritage and financial management at the Institute The Department of National 2.4 The Department subsequently undertook a Heritage detailed analysis of the content of the Corporate Plan, and considered the Plan in 2.1 The Department sponsor the Institute as part the light of Cabinet Office guidelines on the of their broad cultural remit and within their corporate planning for non-departmental overall aims which are “to conserve, nurture, public bodies, in order to form a view on what enhance, and make more widely accessible they would want future Institute Corporate the rich and varied heritage of the countries of Plans to contain. The Department concluded the United Kingdom”. In order to achieve that, whilst the current Plan succeeds in these aims the Department seek to create the providing a good overall coverage of the conditions which “maintain, increase and Institute’s activities, they will be suggesting a make available the national collection of number of ways in which future Plans might books, works of arts, scientific objects and be developed, including such matters as a other records and artifacts of the past and closer articulation of the Divisional plans, present”; and “to encourage the living arts to targets and budgets with the core aims of the flourish - including.. film ” Institute: and details of the staffing levels in each Division. The Department will be 2.2 The Department have broadly similar discussing these with the Institute in early relationships with all their sponsored bodies, 1994. which respect the freedom of those bodies to take decisions within their areas of 2.5 The Department also receive the annual report responsibility. The planning process is the and audited annual accounts of the Institute, fundamental mechanism for accountability together with forecasts and other financial and assurance as to value for money from the information. The Department consider that grant given. Under new arrangements since the Institute publish one of the best annual the creation of the Department in 1992, they reports produced by its sponsored bodies, and require the Institute and others to present that it is well laid-out and informative. In mid each year a Corporate Plan looking at the three years of the next Public Expenditure round, 1993 the Department established new setting out their objectives, how they are to be arrangements under which their Accountancy achieved and their performance indicators Unit scrutinise accounts and reports from [see Appendix 1). sponsored bodies. The Unit reported that the accounts generally followed accepted formats 2.3 The Institute’s Corporate Plan for the years and conventions, were well-presented, and as 1993-94 to 1995-96, whose preparation is required, had been audited by an external predated the issuing of the approach above, accountancy firm. The Department will be follows the same structure as plans drawn up suggesting to the Institute a number of minor in earlier years, except that the Department presentational points, which should bring the asked for any bids for additional resources to printed accounts more into line with HM be made in a separate document. At a meeting Treasury’s publication “Trading Accounts: A to discuss the plan, held in March 1993, the Guide for Government Departments and Non- Department and the Institute agreed that the Departmental Bodies”. In addition, the Institute should make no change to the Department monitor monthly grant payments documentation already submitted, but that the to the Institute against a cash budget. Corporate Plan produced in the following year should provide a detailed but succinct 2.6 The Department consider that the Institute statement for year one (1994-95) taking have made substantial efforts to produce account of the grant allocation for that year, indicators for important aspects of their work. and a broader outline of the strategy for the They wish to encourage the Institute to find following three years (1955-98). additional reliable measures which will help THE BRITISH FILM INSTITUTE

demonstrate how far the Institute are meeting Financial management their overall aims and, by relating results to resources, the extent of improvements in 2.9 Since the work of the Board of Governors is value for money. The Department stated that crucial to the success of any sponsored body, they would find it helpful for their own the National Audit Office reviewed the purposes to have a few key indicators which arrangements for the conduct of business by were sufficient to illustrate the Institute’s the Governors and interviewed some of them. overall performance, although they recognise The National Audit Office found the quality of there are limitations to the extent to which papers for the Board to be high in almost all this is achievable for an organisation which cases, as were the demonstrations of the has a large number of different activities and commitment and contribution of the services. individual Governors. The use of sub- committees to tackle particular issues 2.7 The Royal Charter provides for a appeared to work well and helped Governors Departmental assessor to the Institute’s to cope with the volume of business at the Governing Body to attend any meeting of the monthly meetings of the full Board. Governors Governing Body, or of any committee expressed their satisfaction with their working established by it. The assessor may not vote at arrangements and confidence in senior any such meeting. The assessor’s role, as management, making only a few suggestions regards Board meetings, is to respond to for refinements such as briefer papers with requests from the Board for information, better summaries. explanation OI advice about Government 2.10 The Director, the Assistant Director and Heads policy on issues discussed by the Board of Divisions co-ordinate and manage the day which are of particular interest to the to day activities of the operating Divisions. In Department. More generally, the assessor April 1992, senior management introduced provides support to Ministers and senior mcxe structured delegation of budgets to Departmental officials in the form of managers and improved accountability. From information. advice and recommendations on that time they have progressively sought to performance or issues in which the Institute introduce more realistic forecasting and may be involved. Particular responsibilities of budget setting; improved monitoring, where the assessor are to make recommendations on appropriate using expenditure profiling; and appointments to the Board, including the developed their recording of commitments. Chairmanship: provide advice on the Figure 1 shows budgets for 1992-93 and Corporate Plan; consider any bids for 1993-94 projections and Appendix 2 shows additional grant-in-aid; and authorise grant an abstract of the audited 1992-93 Accounts. payments. The Department are reviewing, across all their sponsored bodies, the extent of 2.11 Figure 1 shows that total expenditure was detailed involvement necessary to ensure f30.4 million, including f5.4 million from the proper accountability for grants made, while Major Project Fund. Southbank income fell avoiding excessive monitoring. below budget by ~1.3 million or 21 per cent and was funded in part from a contingency 2.8 The Royal Charter provides for 20 Governors created for this purpose by budget reductions who are appointed by the Secretary of State. across all divisions, and in part by a grant of In accordance with Government policy, the Department aim for all their sponsored bodies E659.000 from the Major Projects Fund to include increasing numbers of wxnen and towards the Museum’s net operating costs. people from ethnic minorities among Cost overruns outside Major Project Fund appointees. These aims have been gradually areas included Museum temporary exhibitions realised in the case of the Institute and (f261,OOO) and marketing (E31.000); Film Governors represent at present the interests of Festivals [net fl24.000); and other capital all parts of the United Kingdom and cane expenditure (E31,000). Of the calls on the from film, television, banking, education, Major Projects Fund in 1992-93, f3.9 million trade unions, publishing, the regions, represented preplanned projects and f1.5 Parliament and business. Nominations for two million represented assistance allocated in the of the Governor posts are made as a result of a year including that to meet deficits. At 1 April canvass of Institute annual members, a 1993, the investment value of the Major reflection of the time when the Institute was a Projects Fund was E3.6 million. The Institute limited company rather than, as now, a body had only limited plans to draw on the Fund in incorporated by Royal Charter. 1993-94, and hoped to receive significant additional private donations in that year.

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Figure 1: 1992-93 Budget, Actuals and Staffing by Division and 1993-94 Forecasts 1992-93 1992-93 Difference 1993-94 Division Budget Actual Forecast fm fm cadS”F’ fm Soufhhankl’) (146 staff) TotalOperating Expenditure Income 6.19.2 4.88.8 ‘;:;I 4.8 8.0 less Fundedby Major Projects Fund u m m 26 28 m National Film and TVArchive (121 staff) Operating Income 1.1 1.3 0.2 1.1 Expenditure s 43 oz 42 34 30 04 31 Research ldl +,a,,, Operating Income 0.9 1.0 0.1 1.1 Expenditure 2.3 2.5 2.4 77 75- $J -ix- Production (14 staff) Operating Income 0.6 1.3 0.7 1.1 Expenditure 1.9 2.3 2.2 77 777- $y -cl- Exhibition and distribution (51 staff) Operating Income 0.9 0.3 0.9 Expenditure 24 G G 15 Planning (11 staff) OperatingIncome 0.1 0.2 0.1 Expenditure 2.6 -25 G G- Library and Information Services (35 staff) Operating Income 0.1 Expenditure 0.8 ar Institute services (65 staff) OperatingIncome 0.4 Expenditure 2.5 Ti- M;lprF’r~jecf Fund2 1.3 Expenditure, Including freehold 1.3 propeW and Other assets. computerisationand restructuring Total Expenditure (484 staff) 03 26.1 Fundedby Total operating income (0.3) 9.7 Governmentgrant 15.0 Major proieci fund and reserves 1.4 Source: Institute Management Accounts Notes: 1. The shortfall in Soothbank income was funded in part from a contingency for this purpose created by budget reductions across all Institute Divisions, totalling f0.7 million. 2. See paragraph 2.16. Main items in 1992-93 were a new Film Storage Vault, a special facliify for conserving paper-based materials, a film despatch and technical servicing la&y al the Conservation Centre (f23m); freehold property and other assets (f f.Om): Southbank (f 1.2m); computerisation, restructuring and other projects (fO.9m).

2.12 Following the funding announcement in Institute have also launched a drive to November 1992, pegging 1993-94 funding to increase income including sponsorship. From the same level as 1992-93, and faced with a review of the detailed papers, the National serious financial challenges exacerbated by Audit Office considered that this review the falling income at the Southbank, the process was carried out comprehensively, Governor’s Budget Sub-committee and senior rigorously and efficiently. They recognised management fundamentally reviewed the that forecast income was inevitably tentative position and prepared a manageable budget and the outcome, which involved cuts in for 1993-94. This involved reducing planned budgets and reorganisation, could never have recurrent expenditure by about El.5 million in been popular with all parties. 1993-94 and beyond in line with reduced income expectations and was achieved largely 2.13 Heads of Division have delegated budgetary by staff cuts, by reducing capital expenditure responsibility for their areas and are and by deferring payments of grants. The supported by detailed analyses of monthly

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budget and out-turn figures provided by a improve awareness of the imperatives and powerful and flexible management practice of good financial control. Sound and information system. In view of the income realistic forecasting of income is a key factor shortfalls and budget overspends incurred in in managing services within available funds. 1991-92 and 1992-93, and the tautness of the The Institute had dramatically reduced their 1993-94 budgets, senior management are well income forecasts compared with those in aware of the need for effective financial earlier years which had proved over- control. optimistic.

2.14 Arrangements for budgetary control had been 2.16 The Major Project Fund, controlled at senior enhanced and improved significantly with the management level using special budgets, introduction, since 1992, of a new comprises monies other than Government computerised and fully networked financial Grant and operating income, which are and management accounting system. This donated to the Institute to fund specific offered budget holders at all levels, reliable, capital and other special projects, including, comprehensive and up-to-date information exceptionally in 1992-93, support for the although the emphasis remained upon Museum. Many of these projects benefit more printed-out documents as the focus for than one Division. The National Audit Office budgetary control processes. The Finance noted that some budget-holders in post at the Department take a strong and proactive line time had seen the Fund as simply an supported actively by senior management and additional source of money and had hold regular monitoring meetings with budget consequently treated their budget holders in all cases of potential overspend. responsibilities less seriously. Management’s For example, in July 1993, Finance education of budget holders, together with a Department, reporting on unbudgeted number of staff changes, has subsequently Southbank expenditure, expressed concerns removed such misapprehensions. Internal about the London Film Festival and poor reporting of Major Project Fund expenditure is catering performance. The budget-watch by separated from the standard activity or the Finance Department in 1993 has divisional reporting. Management retains a highlighted the importance of review external view of the full expenditure associated with to spending divisions, as a means to control particular activities and locations by means of and plan for deficits. The National Audit special reports bringing together the necessary Office observed two areas of possible further elements. improvement:

(il budget holders in some areas need to give higher priority to budgetary control, using Activity reviews the tools available to them. This requires continued management action and 2.17 The Institute have undertaken a review of training; membership services and have started a fundamental review of the Southbank. In (ii) the treatment in the managementaccounts 1992, they also introduced a series of activity of expenditure in connection with certain reviews. These are innovative reviews aimed non-Government grants given for specific at difficult effectiveness issues such as the purposes, and areas where grant income is cultural impact of activities, as well as netted-off against expenditure, can in improvement in efficiency. Topics chosen by some cases result in ambiguity as to the the management board to date for review are full costs of the activity in question and Film Festivals, Cultural Equal Opportunities, confusion in the mind of the budget Children as Audiences and Education and holder. Training. For the initial period, the Institute decided to focus the reviews on pan-Institute 2.15 In the past, not all Parts of the Institute issues, rather than to target particular necessarily afforded budgetary control priority departments. Reviews are each led by a and prominence on a par with pursuit of their Governor and are progressed mainly by teams cultural objectives. The efforts by Finance comprising people from outside as well as Department to police the budgets and from within the Institute, with support from a challenge potential overspends are therefore policy reviews officer. The review of Film all the more important, as are their efforts to Festivals [the first to be undertaken) took a

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year to complete. Although it focused on some key issues, senior management have Key Points reservations about the balance of the report and have yet to endorse it. The timing and 2.19 The National Audit Office consider the topics for future reviews are still being following to be the key points: considered but the Cultural Equal Opportunities Review was completed in (i) Systems for preparing budgets and September 1993, and a further review, on controlling income and expenditure are Children as Audience, commenced in mid basically sound but the use to which the] 1993. Senior management, in October 1993, are put could be improved further; took direct responsibility for activity reviews. (ii1 Trading activity levels are inevitably difficult to forecast. Shortfalls in trading 2.18 Activity reviews are a necessary, if potentially income in 1992-93 and more cautious painful, extension of the scrutiny and income forecasts for 1993-94 and beyond questioning implicit in corporate planning together with lower than expected and budget setting processes. The balance of funding from the Department, have led cultural, organisational and personal the Institute to make staff cuts, reduce dimensions is problematical, especially where capital expenditure and defer grants. such reviews are still new to an organisation; and good commitment of staff to the process is (iii) Trading income shortfalls, and smne essential. In the view of the National Audit budget overspends, in 1992-93 were a Office there could be benefits to value for significant problem and made inroads money if greater priority was given to the into the Institute’s reserves. larger expenditure areas. Senior management (iv) Awareness of the imperatives of good have now put this in hand. Shorter timetables financial control in some areas of the and a greater sense of urgency for each study Institute is such that senior management’ might also be advantageous, even if that continuous attention and active Finance demanded more circumscribed terms of Department policing of budgets remains reference and curtailed iterations of important; discussions of more peripheral aspects. [v) It is important for the Institute to press ahead with their programme of activity reviews which will need to examine in a penetrating way many aspects of their work in the next few years.

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Part 3: The National Film Theatre, Film Festivals and the Museum of the Moving Image 3.1 The National Audit Office reviewed the 3.2 Overall attendances at the National Film financial performance of the National Film Theatre and the Museum have declined in Theatre, the Film Festivals, and the Museum recent years, and financial performance of the Moving Image operated at the reflects this (Figure 2). The Institute recognise that the key factors in this decline at the Southbank. Figure 2: Summaryof SouthbankFinancial Performance1992-93 Income and Expenditure by activity Budget AChEA Difference (adverse) f’otlo f’ooo f’000 % The Museum of the Moving Image Ooeratina Income 2.113 1.566 (5471 1261 Expendi& 2.838 i343j iizj OperatingDeficit (752) (890) (123) Grant from Major Projects Fund: Temporary Exhibition 150 OperatingDeficit ResidualDeficit (575) National Film Theatre Operating Income 634 513 WI) (W Expenditure 1.439 1.381 Net OperatingDeficit (805) (868) Film Festivals Operating Income 523 666 143 27 Expenditure 63 ~ (267) (35) Net Operating Deficit (240) (364) (124) (52) Catering Operating Income 1,276 1,034 (242) (19) Expenditure Net OperatingSurplus (Deficit) Retail Operating Income 1,122 726 (396) (35) Expenditure 986 743 243 Net OperatingSurplus (Deficit) 136 (17) (153) Membership Operating. Income 432 325 (107) (25) Expenditure 320 (13) 0 Net OperatingSurplus 5 (120) (96)

Expenditure 572 687 VW (20) Grant from Major Project Fund 355 355 Subsidy from grant-in-aid (217) (332) (115) (53) Central overheads allocated 366 388 Central continQency2 670 670 Summary Total Southbank Operating Income 6,100 4.830 (1.270) (21) Total SouthhankExpenditure 9.180 8.829 351 (14) Less Funded hy Major Projects Fund (565) (1.164) W) (130) Net Operating Deficit (2.575) (2.635) (260) (10)

Source: lnsfitute Manaoement Accounts 1992-93 Notes: I. Expenditure for each activity includes general Southbank overheads, allocated for 1992/93,on a square footage/head co~nl basis. This new basis relieved the Theatre of f0.9 million of overheads compared with the previous basis. 2, The income shortfall was funded in pan by budget reductions acnxs all divisions to create the central COniinQency.

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Southbank include the recession; the major the widest audience, for screening in changes in patterns of cinema attendances; technically excellent conditions. The Theatre increasing competition among museums for presents, in their appropriate context, classic paying visitors; higher expectations of films of a particular era, genre or type: and audiences; deterioration in the physical fabric seasons of films exploring a particular theme, of the complex due to lack of funding; and the director or artist. varying patterns of international tourism. The National Audit Office examined the extent of 3.6 The National Film Theatre has two main the deficits and under-performance: the screens, “NFTl” with 466 seats and “NFTZ” sensitivity of financial performance to with 162. Evening screenings also take place attendance numbers: and how the National in the Museum Cinema which has 135 seats. Film Theatre and the Museum were adapting Each year about 1,400 different films are to survive this difficult period and plan for shown including feature films, short films, the future. animation and documentaries. For full length films, the usual admission price is f3.95. Key 3.3 Figure 2 shows Southbank financial statistics and the decline in attendances over performance. The main areas of overspend the last ten years are shown in Figures 3 were Museum temporary exhibitions f261,OOO and 4. and marketing E31,000: membership marketing f20,OOO; capital expenditure Figure 3: 1992-93 Admissions, and Key E274,OOO; and Film Festivals E124,OOO (net]. Financial Figures for NFTl, NFT2and the An allocation to the Museum from the Major Museum Cinema Projects Fund of X659.000 and the Central Budwt Actual Difference Contingency allocation of G~O,OOO helped to contain the deficit. Admissions 196.000 165.000 (31.000) Screenings 2109 Average number of sold 78 3.4 As described in Part 2, during 1992-93, the tickets per screening Institute cut expenditure at the Southbank (by s175,000), tightened budgetary control, Income (POOO) 716 5741’1 “;g) instituted major senior management changes Expenditure (f’000) 1.495 1,441m Subsidy (FOOO) 779 867 (88) at the Southbank, devised cost-savings Subsidy per sold ticket f5.25 measures, including staff restructuring. They Subsidy per screening f411 also integrated the Southbank management accounting function nmre closely with the Source: Institute Management Accounts and Box Office Data main Finance Department and brought it Notes 1. Includes sponsorship and income from outside hirers. under tighter control. 2. The expenditure figures for NFTI and MFT2 include apportioned general Southbank overheads. Those for the Museum Cinema include direct costs only - The National Film Theatre indirect costs for this Cinema are recorded with other Museum expenditure and cannot be isolated. 3.5 The National Film Theatre aims to bring as wide a range and as large a number of films to

Figure 4: Attendancesat the National Film Theatre 1981/82 to 1993/94 Tickets Sold (‘000) 300

200

81182 82/83 63/84 84/G 85/86 86187 87188 88189 89/90 go/91 91/92 92/93 93/94(&) Year Source: Institute Box Office Data. Note: Excludes London Fi/m Festival

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3.7 The opening in 1988 of the Museum Cinema, . Increasing competition from other sources where annual admissions now average some of art-house and non-commercial films 20,000, has partly offset the progressive fall of including BBC’& Channel 4, Videos and a 65,000, or 31 per cent at NFTl and NFTZ in rise in the number of independent the period. While the number of screenings cinemas. (The resurgence in public has remained fairly constant, the occupancy cinema going over the last 5 years has rate has fallen, as shown in Figure 5. focused on the new multiplexes which provide high quality public facilities.) 3.8 Figure 6 shows, for example, that in 1991-92 50 or less seats were sold for each of nearly l Price. (Although the Theatre is cheaper 700 screenings (nearly 850 in 1992/93) and than a West End cinema, the price that in both years 300-350 seats were sold for differential between the Theatre and other each of about 20 screenings. independents has reduced in recent years.) 3.9 While there has been no explicit or formal analysis of reasons for the pattern of, and . Declining numbers of Institute annual changes in audience levels the Institute members. acknowledge the major factors to be: 3.10 Annual members represented 78 per cent of

l the recession. attendances in 1992-93 (81 per cent in 1991-92). The National Audit Office found . the location and physical environment of that attendances by day members had the complex. (They are remote from West- remained relatively static at about 36,000 per End cinema going. The Southbank year in 1991-92 and 1992-93 but attendances complex and approaches have by annual members - consistently averaging deteriorated in recent years and the fabric of the Theatre, particularly front of house, about 5 each per year-had declined in total has been neglected due to lack of funding.) Figure 5: Occupancyrates at the National Film Theatre 1988 to 1993 (paragraph 3.7 refers) Fioures.~ inchdinn -- ...- ~nmnlim~nfarvti~kts. . . ..-...... -., I hid fidiefl screen Capacity AlTlUd 1988-89 1989-90 1990-91 1991-92 1992-93 1 199;;~iii “-“%9;;93 lor each Capacity % % % % % screening 1992-93

NFrlNFTZ 466162 379,000165,000 ii ii i: :: :; :i z: MuseumlCinema 136 40.000 52 54 58 57 53 56 5” Source: Institute Annual Reports and MAO Analysis Notes: 1. Complimentary tickets are given to sfaffand selected media representatives, under careful c~nfml 2. Excludes London Film Festival

Figure 6: Distribution of audience sizes 1991-92 and 1992-93 (paragraph 3.8 reiers)

Numberof Screenings1991-92 Numberof Screenings1992-93 900 300 800 700 700 600 600 500 500 400 400 300 300 200 200 100 100 0 0 50 100 150 200 250 300 350 400 450 SeatsSold SeatsSold

Source: Institute Box Office Data and NAO Analysis.

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from 149,000 to 130,000 accounting for 3.13 At the time of the study the marketing virtually all the decline. In 1992-93, with an department did not have a significant input at average of 26,000 members, 10,ooo the programme planning stage and were memberships lapsed and only 5,000 new required to ‘market’ a seasOn after programme members were recruited. This represented a ideas had been formulated and developed. reduction of 14 per cent on recruitment in Senior management carried out a review of 1991-92. The Institute recognise that the marketing activities at the Southbank during decline in annual membership represents a the period of the National Audit office study. threat to audience levels and thus financial They concluded that the overall structure of viability. They are pursuing membership as a dedicated teams supporting the Museum and high priority. Theatre was working satisfactorily but recommended immediate action to strengthen 3.11 Programming is important to audience and improve liaison between programming satisfaction and attendance numbers, as well and marketing, reinforcing a view which the as determining the cultural worth of the National Audit Office had cane to separately. screenings. The ability to change The review also asserted that - “while programming to remedy poor attendances is operations should remain programme led, the constrained by long planning lead times pursuit of our cultural objectives has to be (3-4 months for publication of programme informed by the commercial and budgetary booklets and sometimes longer for scune imperatives. Where there is a genuine conflict aspects); research and set-up costs on planned between our cultural and commercial or seasons; and considerations of the cultural budgetary objectives, and a balance has to be remit. The Institute have not analysed the struck between them, it is the responsibility of effect of programming policy on audience the Head of Southbank Division, not the levels but consider that the likely maximum Programme Director or Head of Marketing”. impact might be 10 per cent. There have been numerous changes and experiments with 3.14 While recognising the difficulty of forecasting particular aspects of programming in recent the level of attendances which will be years, but the overall policy of showing large achieved for a particular film, seascm or numbers of different films, many short programming strand, the National Audit seasOns and no long runs of particular films Office noted that the Institute did not set had remained broadly unchanged. However, attendance targets at those levels. Nor did in late 1993 the management, including the they monitor achievements in those terms new Head of the Southbank revisited the within the year, monitoring being only against assumptions underlying the broad the previous year’s monthly attendance programming approach and are now to show profile. The National Audit Office considered longer runs of some films with the expectation that clearer focus on attendance achieved in of improving attendance levels. Screenings at relation to programming strands would the Museum are separately programmed by improve the ability of programme planners different staff from those at the main Theatre and marketing to review their achievements. but since mid 1993, are under the overall They would also be able to alert senior direction of the Theatre’s Head of management nmre quickly to any need to Programming. revise forecasts and take other measures to compensate more promptly for reduced 3.12 The National Audit Office found that the income levels. Senior management and the programme planning process was largely new Head of the Southbank instituted in late divorced from the forecasting and budgeting 1993, reviews of the achievements of process. Budgeted income and attendance programme strands, as well as revising the targets, based to smne extent on previous broad programming strategy. years’ achievements, derived from the overall budget planning process rather than 3.15 Although a limited telephone survey of pmgmmmnrs’ forecasts of audience levels and Institute members was undertaken in 1989 there has been very little recent systematic income or particular seasOns or screenings. research of audience views on Theatre Programming decisions were not significantly programming. However, the primacy of their influenced by forecast income figures or past cultural remit means that the Institute do not attendance levels. judge their success mainly by attendance numbers, but by factors such as cultural relevance, peer group acclaim and

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uniqueness. There was until late 1993, no formal review process for films or seasons of Key Points films but past performance was fed back into future planning through programmers’ 3.19 The National Audit Office consider the accumulated experience and judgement. following to be the key points. Partly in recognition of audience reductions and financial performance, in the Summer of (i) Audience levels are in progressive 1993 the Institute decided to start issuing decline and this represents a threat to opinion questionnaires to audiences. financial viability. 3.16 In recognition of reduced attendance levels (ii) There is a linkage between audience the Institute have set more prudent income levels and annual membership, but new targets for 1993-94 and beyond, based on membership recruitment is not keeping figures achieved in 1992-93. They also plan a pace with membership lapses. series of actions designed to improve attendances including refurbishing the public [iii) In these circumstances regular and areas; pressing for improvements in the systematic audience research is approaches to the Southbank; freezing ticket increasingly important. prices: and cost saving measures, including on [iv) Whilst recognising that a difficult balance film transport. They also commissioned in needs to be struck between cultural and Autumn 1993 an improved box office system financial objectives, programmers need tl which will enable them to track and analyse have more regard to attendance levels. audiences. The system is also intended to be used as a powerful marketing tool to target (v] If actions being taken are not effective, it and research specific audiences. The Institute may prove difficult to sustain the current are increasing their marketing spend at the level of operations within existing Southbank, introducing a new corporate financial resources. identity programme to increase awareness of I Southbank activities and a new advertising campaign targeting particular audience areas, Film Festivals such as students, and using improved listings advertisements. 3.20 The Southbank Film Festivals Office organise the London Film Festival, the Jewish Film 3.17 A review in 1992 led the Institute to Festival and the London Lesbian and Gay restructure the Membership Department to Film Festival. In 1992-93 film festivals cost give a more marketing-orientated approach f1,030,000 with revenues of f666,OOO plus aimed at increasing membership renewal; sponsorship-in-kind valued at f74,OOO. converting day members to annual members; Attendances were 80,500 of which 64,000 increasing members’ attendances; and were to the London Film Festival, equal encouraging first time attenders to the Theatre. The members’ benefits package has to 39 per cent of annual sales at the National also been restructured with cost and Film Theatre (Figure 7). marketing concerns in mind. For example, the libraryservice is chargedfor separatelyand 3.21 TheLondon Film Festivalwhich spans two the handbook is not routinely sent to all weeks in November, has attracted an members. increasing number of visitors -up 40 per cent since 1988 -and self generated income. 3.18 The Institute recognise that if in the short to It is separately programmed and managed medium term attendance numbers do not using the Theatre and other venues. The pick-up quite significantly, they will have to Festival Director, who controls the budget, take difficult decisions if they are to sustain engagestemporary supportstaff separately the current level of operations without ever from the rest of the Institute and selects key increasing subsidies. They therefore set up a attractions which vary from year to year. For Governor’s Sub-committee in summer 1993 to example, a major West End cinema was conduct a fundamental review of booked for the 1992 Festival, the financial risk programming activities. They are due to report falling to the Institute. Income, particularly before April 1994. from sponsorship and box office sales, rose from f252,OOO in 1988 to f611,OOO in 1992.

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Figure 7: Aitendancesat Institute Festivals Figure 8: FestivalsIncome and Expenditure 1988-1992 199243 No. of tickets sold ‘000 Budget Actual Difference Festival 1986 1969 1990 1991 1992 (adverse) London Film Festival 45 50 59 60 64 ~000 f’000 PO00 % Lesbian and Gay London Film Festival Film Festival I”&Xll~: Jewish Film Festival Box Office 297 347 50 17 Sponsorship and source:hlstitole BOXoffice Data Grants 0) 124 231 107 Notes: Prior to 1991 Film Festival admissions were separately Other sales 49 33 (16) identified only for London Expenditure 728 977131 (249) (34, b 3.22 As shown in Figure 8, Institute subsidy to the Net Subsidy 258 366 (108) (42) London Film Festival in 1992-93 was Lesbian and Gay Film Festival f366,OOO; f108,OOO or 42 per cent over budget. Reasons for poor budgetary control mirror IncomeExpenditur&1 4217 4036 (1;; (IQ those described in Part 2 of this report. In Net Surolus 25 4 (211 1841 addition, commitments were not properly controlled, budgets agreed with senior :;c;i;;Film Festival 11 15 4 36 management were in some areas unrealistic Expenditure@J 16 17 1 6 and disregarded, and monitoring was Net Subsidy 7 2 5 71 inadequate. The Institute have improved these arrangements for 1993-94 and are committed Total FestivalsIncome 523 666 143 27 to major and general improvements in Total Festival Expenditure 763 1030 (267) 35 budgetary control. They have also taken steps Net Subsidy 240 364 (124) 52 to emphasise budget holder accountabilities Source: Institute Management Accwnts 1992-93 for net subsidy targets. Notes: 1. Some of the sponsorship, estimatedaff74.000,for the London Festival was received ‘in kind’ and is excluded 3.23 Especially in the Institute’s financial from the figures. circumstances, the National Audit Office 2. Direct crxts only are identified for the fw smaller festivals. recognise the need for the budgetary control 3. Approximately f77.000of the London Film Festival measures taken and the ‘ring-fenced’ budgeted qenditure overr”” reflects the “se of sponsorship subsidy for the Festival. A staff member not anticipated in the budgets. dedicated to providing financial advice and support to the Festival Director might also be needed and might focus upon detailed and Key Points frequent monitoring. The Institute put this into practice in Autumn 1993. We suggest that the 3.24 The National Audit Office consider the Institute operate to a clear Festival financial following to be the key points. plan containing unambiguous break points for senior management review, with options and (i) Budgetary planning, monitoring and contingencies for alternative ways forward, control of film festivals need to be particularly if planned sponsorship and other enhanced if net subsidy overruns similar income levels achieved at each point in the to those in 1992-93 are to be avoided. plan are not up to target. And wherever (ii] The London Film Festival Director may possible, commitment to discretionary need the assistance of a staff member expenditure should be avoided until dedicated to providing financial advice sponsorship to cover the activity has been and support. This was put in place in agreed. Autumn 1993. (iii) A clear Festival financial plan should be approved, containing break points for senior management review.

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The Museum of the Moving Image running costs. It aims to break even financially but is not currently achieving this 3.25 The Museum, opened in 1988, traces the objective. Costs of E3 million in 1992-93 were development of cinema and television from partly offset by income of El.6 million (see the earliest cinematic experiments through to Figure 2). future technologies. Some 50 main exhibit areas, many offering “hands-on” experience, Admissions show the history of the moving image - from 3.27 Figure 9 shows declining audiences from Chinese shadow theatre to modern animation, 536,000 in 1989-90 to 368,000 in 1992-93. from Charlie Chaplin to the operation of a On a full-cost basis, 700,000 visitors would be television studio. The Museum also houses a needed to break even financially. cinema which is used for lectures, screenings and events during the day and shows a 3.28 The National Audit Office’s analysis of repertory programme of films in the evening. admissions for the 36 months to September Educational work is a priority for the Museum 1993 suggested an average annual decline of with expenditure of E85,OOOin 1992-93. about 10 per cent. If this trend is not halted There is a full-time Education Officer, a suite the admissions targets for 1993-94 and of study units, and an educational programme 1994-95 will not be achieved. for school children and students of all ages. In 1992, sxne 30,000 students visited in 857 The Institute have not formally reviewed the groups; two-thirds were from primary or 3.29 reasons for the decline in visitors or assessed secondary schools. The Museum is widely regarded as a cultural success and 95 per cent the impacts of individual contributory factors. of visitors rated the Museum as good or very But they consider that the following points are good. important (in addition to the general factors affecting all the Southbank). 3.26 The capital cost of the Museum of the Moving Image was funded entirely from private . the recession was reflected in an average sources - primarily a major benefaction - 8 per cent fall in visitors at the top 20 UK and the Institute undertook not to request any charging attractions between 1990 and additional public funding for Museum

Figure 9: Admissionsto the Museum of the Moving Image since opening in mid 1988

Source: Office of Arts and L;braries Annual Report 1992 and Institute Corporate Plan 1993

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1991. Attendance at the Tower of London allow more time for the financial fell by 16 per cent and at Madame arrangements, for example with sponsors, to Tussauds by 12 per cent, while those at be fully assessed and in place before the Museum fell by 19 per cent. significant costs are incurred - one of the difficulties encountered on Pop Video. They . the Museum has not established itself on would also allow adequate time for planning the tourist map, particularly for those linked marketing and thus maximise the overseas tourists whose major tourist benefits of the marketing spend. attraction itineraries are planned before they reach the UK. At the same time the Museum has lost some of its novelty value 3.32 Recognising the highly competitive market in since opening 5 years ago and has now to which they operate, the Museum give high fight harder for attention through priority to marketing. Their strategy has marketing. There is also increasing included targeting specific audience sectors; competition from other attractions. advertising to boost themselves as one of the key London attractions; market research; . a change in key personnel in the education outreach; and press and public marketing department in 1991 at a crucial relations work. Despite the heavy investment stage of the Museum’s life may have in marketing - about Z~OO,OOOor fl.10 per impacted on the effectiveness of visitor in 1992-93, visitor attendances have marketing. continued to decline. Even a +Z30,000 package l lack of public awareness - evidence is to boost attendances over the 1992 Christmas limited to the Museum’s participation in holiday period did not have the desired effect other organisations’ visitor surveys and of increasing visitors by the target 8,000 to concentrates on foreign tourists, but 10,000 people. December and January figures suggests that the public lacks awareness of together were down 18 per cent on the the Museum. previous year. . although the Institute consider the admissions price (f5.50 with concessions) 3.33 The Institute developed a new marketing to be competitive, they decided not to strategy in 1993, although budgetary increase it in 1993. constraints prevent full implementation. The main strands are a new advertising campaign 3.30 To boost visitor numbers, the Institute have supported by market research to redefine the held a programme of Museum temporary Museum’s persona from Summer 1993; a exhibitions which the Institute are now corporate identity improvement programme to reviewing. In 1992-93 “Pop Video”, the largest ever Museum temporary exhibition, help raise the public’s awareness of what is on ran from August to January and provided a offer at the Southbank from Summer 1993; focus for marketing activities. This exhibition and continuation of the same level of cost E311,000, with a further E194,OOO being marketing expenditure to build visibility spent marketing and promoting it. Together through promotional literature, presence in these costs represented some 17 per cent of guidebooks, promotions etc. At the time of the the Museum’s total expenditure. However, National Audit Office study, a review of the despite this expenditure, visitor numbers whole of the marketing effort was being dropped by 15 per cent in this six month undertaken. period compared with the same period in 1991-92. The Institute believe that 3.34 The Institute have reduced their admissions unpredictable factors such as the risk of and income targets for 1993-94 and beyond, , terrorism were significant and stress that some to the level of 1992-93 outturn [see Figure 9) of the marketing costs would have gone on since previously set targets were no longer general advertising. However, they have now considered achievable. And costs were cut by 1 reviewed policy and moved away from large- staff restructuring in 1993. scale temporary exhibitions. They have introduced smaller budgets, tighter controls 3.35 It is always difficult to quantify with precision over spending and close budgetary monitoring the impacts of marketing, and it is too early to for temporary exhibitions in 1993-94. judge the impact of recent initiatives. The National Audit Office suggest that the 3.31 The National Audit Office recognise the Institute monitor closely these new marketing advantages of longer and earlier planning initiatives and assess whether they represent periods for temporary exhibitions and the value for money. Further market research Institute now insist on this approach. These

19 THE BRITISH FILM INSTITUTE

might be a useful investment in helping to Southbank Retail and Catering pin-point the reasons for the current decline in attendance levels. 3.38 In 1992-93 Retail and Catering Services at the Southbank underperformed against financial targets. Turnover fell compared with X991-92, Equipment partly as a consequence of the fall in the 3.36 The Museum is complex and technically very number of visitors to the Museum and sophisticated with hundreds of audio, visual Theatre. However, the retail spend per head 1 and electronic exhibits operating also fell from fl.60 to fl.40. Retail and continuously. To satisfy the paying public, it Catering Services involve about 40 Institute is essential that they function properly at all staff, some part-time. and represent major times. This imposes exacting technical activities. The management challenge to / standards and as yet equipment failure has achieving budgetary targets is to balance not affected the quality of service to visitors. reducing income with flexibly reduced costs The Museum’s inventory of equipment at the same time as stimulating sales. includes ‘end life’ dates which indicate the Accepting the recommendations of a levels of investment necessary to sustain the consultant’s review of catering services in Museum at the present level. They identify 1992 which assessed the potential for 1993-95 as the key risk period for equipment contracting out, the Institute are to retain coming to the end of its useful life. The catering in-house, so long as budgets and Museum consider that from 1992 to 1995 targets are met. some f470,OOO a year is required for essential equipment maintenance, repairs and 3.39 Since the financial projections for catering as replacements, but only f191.000 was at 30 June 1993 were well below original budgeted for 1993-94. income forecasts, management have resolved to remedy the situation along the lines of the Ley points consultants recommendations, before April 1994. 3.37 he National Audit Office consider the I Illowing to be the key points. (ey Points ) Audience levels are in decline and this represents a threat to financial viability. 3.40 ‘he National Audit Office consider the I i) The Museum give high priority to Dllowing to be the key points. / marketing and, having learned lessons from experiences in 1992-93, have i) Southbank Retail and Catering Services developed a new marketing strategy. have underperformed against financial / They need to monitor closely these new targets and the retail spend by visitors marketing initiatives and evaluate their has fallen. / impacts. ii) In view of the projected income shortfall ii) Properly functioning equipment is vital from catering, management have resolved to the Museum. Failures have not so far to remedy the situation before April 94. I affected the quality of service to visitors I but projected maintenance costs to 1995 far exceed budgeted provisions. The L’ Museum need to take a realistic and careful view of equipment lifetimes and maintenance costs, making better use of * Finance Division’s asset accounting systems. I v) The Institute should recognise the full cost of the Museum and its ability to be I self-financing. And in their review of its 1 future they need to view realistically the longer term call on Institute financial resources and their capacity to sustain them.

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Part 4: The National Film and Television Archive

4.1 The National Film and Television Archive is 4.3 The Archive are based principally at the an integral part of the Institute. The Archive Conservation Centre at Berkhamsted, where aim to “select, acquire, preserve and make the collection is housed in first class special permanently available for study and screening buildings which were paid for by private a national collection of moving images which benefaction. The Archive spent about E5.2 have lasting value as examples of the art and million in 1992-93 and generated income of history of cinema or television, or as a El.1 million, mainly from funding by documentary record of the twentieth century”. television companies for recording output and They give particular priority to British and from fees for access to the collection. During British-related material. Some of it is screened the National Audit Office study the Institute at the Museum Cinema and the National Film decided to examine, with advice from a Theatre, including a special series of consultant, means to eliminate processing restorations known as ‘Treasures from the bottlenecks and increase efficiency at the Archive’. Conservation Centre with a view to containing costs. The National Audit Office study Figure 10: Archive holding by type of film avoided duplication of this work which was Safety Nitrate Video receiving attention by the Institute’s senior Running management. TirnP.._ (Feet) (Feet) (hours) Examined material 293.202,213 109,502.636 56,126 Unexaminedmaterial Acquisition (estimated) 254,427,825 64,548,330 23,842 4.4 Film archives worldwide estimate that up to Total Holding 547530,038 174,050.966 79,968 80 per cent of all silent cinema maybe Number of Titles irretrievably lost and consider that most of held 47,403 94,965 1~32,201 what has survived from this period (1895 to Source: National Film and Television Archive about 1930) is thus intrinsically precious and Note: The collection includes features and short films, should be saved. The Archive also try to save animation, documentaries, newsreels. ielevfsfon programmes. amateur films and videos. The Archive a/so holds the Institute’s as much as possible of British sound film from exfensive collection of stills, posters and designs from film and the nitrate era (1929 to 1951), smne 25 to 30 television. per cent of which has been irretrievably lost.

4.2 Figure 10 shows an analysis of the Archive’s 4.5 Acquisition policy is based on informed holdings of some 275,000 titles. There is no selection by qualified and very experienced statutory deposit scheme for film in the UK staff and expert consultants. For each category and the Institute rely largely on donations. -fiction, non-fiction and television-a There is currently no budget for acquisition by Keeper of Films or Television decides what to purchase of feature or documentary films. acquire to best meet the aims of the Archive, They have statutory rights to record most by applying guidelines devised in the early television output for archival purposes and, years of the Archive and last revised in 1993. from January 1993, enjoy statutory These are set out in Figure 11. arrangements, including funding, for recording ITV programmes. This will also 4.6 An important recent acquisition was a apply to Channel 5 in due course. The collection from the Rank Film Archive Archive record 25 to 30 per cent of output containing most of Rank’s feature film output from the commercial channels for from the 1930s and 1940s in its original form. preservation and access. Funding from the Of the 2,471 films acquired between January BBC is on a voluntary basis and all output on 1991 and June 1993, only a quarter were of both BBC channels is recorded on cassette for UK origin. Other recent acquisitions include: access purposes only.

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Figure 11: Acquisitions Guidelines and Volumes Fiction Non Fiction Television l a product of the British film industry. l actuality records of contemporary history. . current programmes. recordedas they are and twentieth century society, broadcast, . British-related, either by subject matter or principal people involved. and . first occasions or appearances.records of l old progammes.acquired from donors customs and activities. such as television company archives, l Films which are important becauseof their merit or influence or. in the case of foreign l Items which fill out a composite picture of, l selectionsfrom IN and Channel4 films. which are threatened or inaccessible for examole. a orominent oerson’scareer emohasisina” British material. in their country of origin-in the latter and port&re: case, often as part of a referencecollection . Significant appearancesby British people rather than for permanent preservation. l items which are characteristicof the on overseas channels. times, l all main newt and current affairs l scientific. industrial and technological programmes. .! films. either instructional or recording D~OC~SS~Sand progress. l major documentaries, Note: The Archives are a desionated l British plays and drama series. repository for the preservation of selected l examples of British “soaps”. public record materials on film. And they have a special responsibility for preservationof l major variety programmes. recordings of Parliamentaryproceedings. l topical comedy shows. . sporting events and music and arts programmes.

l examples of other major series. About 1.290 titles each year About 2.090 titles each war About 12.000titles each war Source: British Mm Institute.

. 293 Chinese films from the Chinese The Archive may, however, need to Embassy. This may include material reconsider this if physical storage becomes a which, having been banned in China due constraint at some future date. to political changes, might not otherwise survive, and will be of considerable interest for purposes of study and Preservation research.

. 141 films from the French Institute in 4.8 From 1895 to about 1951 most 3.5mm London relating to 1940-1960 when professional or theatric film was produced on French cinema was a major influence on a cellulose nitrate base which is highly UK cinema. flammable and deteriorates irreversibly through chemical decay. This film is stored in . a collection of Asian films (mainly from special, cooled concrete vaults while waiting India and Pakistan) - of increasing to be processed and copied onto modern film importance in Britain’s mixed culture and stock. Some post-1951 ‘safety’ film on a also not necessarily likely to survive in cellulose acetate base is deteriorating and the the countries of origin. dyes in colour film are also gradually fading. 4.7 The National Audit Office noted that the A new safety vault was opened in 1993. The Archive’s acquisition guidelines can be preservation challenge is enormous. interpreted legitimately with a good deal of latitude. For example, any film shown in the 4.9 A 24 year programme to copy all nitrate stock on to modern film started in 1976, but with UK may be judged to have had an impact on ,’ the national consciousness. One financial continuing financial constraints the Institute implication for the Archive of operating broad have abandoned this target, and in recent acquisitions guidelines is that storage costs years the strategy has been to try to identify may escalate. But given the relatively small and give priority to that material in most physical volume of fiction and non-fiction imminent danger of deteriorating beyond acquisitions in recent years and the largely repair. So far about a quarter of all nitrate film self-financing arrangements for archiving holdings have been preserved, representing television broadcasts, a more fastidious 41 per cent of that which has been examined. approach to acquisitions seems unnecessary. At current rates of throughput [see Figure 121,

22 THE BRITISH FILM INSTlTUTE

preservation of already examined material 4.13 Since the need and priorities for preservation might take 60 years to complete. In addition, of nitrate films depend on the reliability of the the Archive consider that unexamined footage chemical test used, the National Audit Office may generate preservation copying work sought advice from the Image Permanence equivalent to possibly 20 further years. Not all Institute in the USA, on the reliability of films will merit preservation and the Archive current testing arrangements. They advised believe that a proportion is likely to survive that the Archive’s chemical test is well some way into the next century, thanks to recognised and established but that results their good storage conditions. But they remain could well be misleading when applied to wary of an increase in the rate of deterioration film stored at low temperatures. The Institute as time passes. accept this view but point out that alternative tests would be more expensive to operate and 4.10 The Institute consider it important to reduce very destructive to the film being tested. the present preservation copying timescale to a maximum of 20 years if desirable material is 4.14 Keepers reappraise unstable film but they are not to be lost before it can be preserved. This reluctant to reject acquisitions made by suggests that about four million feet will need predecessors and the majority of items held to be preserved each year. The Archive plan to are approved for preservation. Film that has increase throughput to about three million visibly deteriorated or is “sticky” is afforded feet in 1994-95 using earmarked additional top priority for preservation and all film funding. And they hope to increase this figure shown to be unstable by chemical test is as resources permit. afforded very high priority. Prioritisation for preservation, within these two broad Figure 12: Progress of Film Preservation categories, is dependent upon judgement in Years Footage Preserved the light of a number of factors. The absence lmillionl of rigorous prioritisation procedures does not 1376-87 34.2 pose a threat of loss of unstable film since, at 1388-89 1.2 present, virtually none of the unstable film 1389-30 2.1 133631 3.1 decays irretrievably before it is preserved. 1331-32 2.6 However, the Institute recognise that as the 1332-33 1.6 years go by and the likelihood of loss 1333-34 1.6 Total 46.8 (approx) increases, they will need to develop more Tntal hddi”” 174~(1 sophisticated arrangements to leave until last Source: National Film and Television Archive only the least important unstable film. The Archive are collaborating internationally in 4.11 For nitrate film, preservation work research into film degeneration. concentrates on material shown to be unstable by visual inspection or by a chemical test 4.15 The Archive hold on a computer data base applied cyclically to each film every three detailed information on volumes of holdings years. There are about four million feet of of nitrate film, both stable and unstable, on identified unstable film awaiting preservation, the extent of newly identified unstable over two years of work at recent rates. material and on the pace of processing Physical condition is one factor which material. There was a growing awareness on dictates preservation priority; cultural the part of the Archive, as to the use to which importance of the film and/or demand for it is this data could be put, if suitably interpreted. another. With present throughput volumes, The National Audit Office considered that this the former factor predominates. data could be used more positively to track over time the types and ages of film 4.12 A corresponding routine chemical test for contributing to increases in unstable holdings. acetate safety film is not available and This could help the Institute to forecast much deterioration is only identified when access is more rigorously progress towards resolving attempted. However, means of detecting this the backlog, to predict when significant form of deterioration are being sought, and amounts of material would be lost by meanwhile an experiment designed to deterioration and to estimate future stabilise acetate film is being tried out in co- processing requirements. The data could also operation with Kodak USA. be developed to help the coming prioritisation challenge described in the preceding paragraph. The National Audit Office consider

23 THE BRlTISH FILM INSTITUTE

that the case for developing and monitoring Figure 13: Viewing Service Statistics for such figures and projections should be 1992-93 examined by the Institute as part of their in- Viewer FeattIleS Shorts house exercise looking at processing 564 individuals/groups 537 1.064 bottlenecks. National Film Theatre and Museum events 105 176 4.16 The National Audit Office examined an RegionalFilm Theatres 177 23 Other Institute Departments 127 127 illustrative sample of 40 items preserved Archive presentationsat the between August 1992 and June 1993 and National Film Theatre 17 8 found that the items met the current Archive presentationsat the Museum 186 4 guidelines for acquisition. Museum of London Film schools ;1, :i Imperial War Museum 2 0 Other United Kingdomvenues 17 10 Access Internationalarchives iO5 32 Other users abroad. 44 15 4.17 The Archive have a remit to make the Total 1.516 1,563 collection as accessible as possible. They Source: National Film and Television Archive make copies of master material for use as viewing copies wherever possible, often as an integral part of the preservation process when Income generation the new master is a negative, although 4.19 The Archive’s cultural objective does not stop currently no funds are available to produce them from aiming to cover costs and raising additional viewing copies. At present. only 22 income wherever possible. The area of most per cent of film material is available as commercial potential is the Production viewing copies which although it represents Library, which supplies extracts from the nearly 30,000 titles, is a concern to the collection to film makers for use in films, Archive. Some 27 per cent of preservation work was for access purposes in 1992-93, an television, advertisements or company videos. Almost 95 per cent of footage supplied is for increase from 14 per cent in 1991-92. There use in television. The resulting programmes are three types of access: Donor Access: via are seen by millions of people which helps the Viewing Service (for students, lecturers, the Institute to fulfil their cultural brief. The non-commercial researchers and cultural film Production Library generated about f130,OOO theatres and festivals): and via the Production of income in 1992-93. Library (for commercial access).

4.20 The Archive own copyright in respect of only 4.18 Donor Access, whereby donors are entitled to a few of the items that they hold; for other request a copy of their donated film, is a items users have to pay a copyright charge to contractual consequence of the voluntary the copyright holder. In some instances the donation agreement. Often users will have to owner of copyright is unknown and the pay charges to the copyright holder in Archive permit material to be used, provided addition to the charges by the Institute for the the users indemnify them against any future provision of a copy. The Institutes’ charges are claims which may arise. restricted to covering costs. The Viewing Service is not intended to provide a major The commercial exploitation of the collection income stream. Indeed the Institute’s pulicy is 4.21 is subject to copyright. Not holding the to keep charges low to encourage use by copyright of much of the collection affects the students and researchers while deterring arrangements for commercial exploitation that casual viewing by a modest charge. Also, too the Archive is able to operate. In one example, high a charge might possibly deter potential they have taken an initiative and produced a donations of material. The main viewing video of Newsreel items from early in the charge was increased from f7 to fl0 per hour century entitled “Topical Budget”. The in 1993. In 1992-93 the Viewing Service Archive own the copyright and have arranged viewings of over 3,000 feature films generated about El,700 so far, without any and shorts, as shown in Figure 13. Income real marketing effort. was only f9.100, reflecting in part, free inter- archive and some other loans.

24 THE BRITISH FILM INSTITUTE

4.22 Since 1983, the Archive have increased their Key Points charges for copying film and search fees only once. The National Audit Office noted that the 4.24 The National Audit Office consider the Archive’s search fee of E8 per title under following to be the key points. 3,000 feet and E24 per title over this length, with a minimum charge of E30, was (i) Holdings of film by the Archive include significantly lower than similar charges levied very large amounts of material that have by commercial libraries which hold rights, yet to be examined. such as Reuters, Thames Television, ITN and the Central Office of Information. But their [ii) Acquisition guidelines ran he interpret& fees are often comparable with or higher than legitimately with a good deal of latitude. those of other film archives. The Archive did The relatively small physical volume of not levy an additional charge for viewing film acquisitions means that a nmre material, nor did they charge extra when staff fastidious approach to acquisitions is assisted in research. Other organisations unnecessary at present. charged between E5o and E85 for these (iii) Preservation of films represents an services. Fees per minute of material copied enormous challenge. Preservation of by the Archive shown in Figure 14, are often nitrate film, in 1976 planned to be at the lower end of the range of those charged completed by 2000, is only one quarter by other bodies for mainstream extract use. In completed and at present rates of 1993 the Archive started to review Production progress will not be completed for Library charges in comparison with other possibly 60 years. organisations’, with a view to encouraging more use of the collection and thereby [iv) Some film will therefore decompose and maximising income via increased turnover. be lost before it can be preserved. The There is certainly a case acknowledged by the Archive’s strategy for assessing priorities Archive, for bringing charges for Adverts into for film awaiting preservation will need line with prevailing commercial practice. to become nmre sophisticated in time. (v) Only around 22 per cent of film material Figure 14: Chargesfor FootageSupplied in the Archive is available as a viewing f per minute Archive Others copy and while this represents nearly use 30,000 titles, it is a concern to the UKN 220 SO-375 Institute. World TV (ex. USA) 660 650-900 World TV (inc USA) 660 650-900 (vi) The Archive did not have a clear Non-theatric use 110 100-360 Adverts - UK 660 2.100-3.600 business strategy to seek to maximise Adverts-World 660 3.600-21,000 income generation, even within existing Source: National Film and Television Archive constraints and their remit to make the collection as accessible as possible. Notes: Unfil mid 1993 Archive charges were halved if the user also had to oa” the coovrioht holder. Their charges for certain services are significantly below those levied by 4.23 The Archive did not have a clear business others who provide comparable services. strategy to seek to maximise income generated Some charges have not been reviewed from its collection which would assist them to and revised sufficiently frequently. fund their preservation work. Whilst recognising the Archive’s reservations about profiting unduly from material generously donated: that this should never become the Archive’s principal function: that income generated may result in reduction in grant allocation: and that the Archive could never aim to fund a significant proportion of their activities from charges, there is scope to improve the level of contribution from the users of the collection. Products could be developed and marketed more positively within an overall marketing strategy for the Archive and the Institute more widely.

25 THE BRITISH FILM INSTITUTE

Part 5: Widening access through regional support

5.1 In fulfilling their national remit, the Institute 5.2 The Institute have not so far translated their give financial and other support for a wide aims into detailed working level objectives range of film, television and video activities which could be used to compare, or assess undertaken by the Regional Arts Boards and consistency between, the impacts of the other organisations throughout the United various forms of regional support provided. Kingdom, in addition to direct Institute However, the Institute intend to reorganise services and facilities. They also seek to give under one head of division and this should their own activities a strong regional help with a proposed fundamental review of dimension and many of their current strategic the area. aims bear directly on the funding and regional support roles. One such aim is “to widen the 5.3 About E3 million of regional support was range of cinematic experience for as many distributed by the Institute in 1992/93 as people and as many regions of the United shown in figure 15. They also offer specialist Kingdom as possible by seeking to improve advice, expertise and assistance, and loans of the availability of film prints, the range of material from their collections. Considerable formats in which they are available, and the Institute staff resources-about 19 staff years number and quality of cinemas and other - are devoted to supporting regional work venues in which they can be viewed.” through assessing and monitoring grant Another aim is “to promote innovation and funding, providing programming advice, film experimentation in the production of film, bookings, film despatch and publicity regionally as well as nationally.” This is materials. The costs of these staff - about entirely in keeping with the renewed E550,OOO - are not formally linked to the emphasis at the Department upon widening service they support. regional access across heritage and cultural areas.

Figure 15: Institute Support far the Regions 1992-93 Institute division Grant f Othernon-grant support Planninq Unit 2X full time equivalent staff for support f&gin&l Arts Board: EasternArts 76,790 East Midlands Arts 98,606 Northern Arts 422.026 North West Arts 204,470 SouthernArts South East Arts EE;t South West Arts 61:510 West Midlands Arts 120.970 Yorkshire Arts llll.Ga Totalto RegionalArts Boards 1.210.708 London Film and Video DevelopmentAgency 362,590 Welsh Arts Council 58,742 DevelopmentGrants to 32 organisations 363,000 Exhibition&Distribution Division -Revenue Grantsto 13 Regional Film Theatres.the 658,530 14 full time staff largely supporting the regions. EdinburghFestival. London Film Makers Co-op and Suppolt and advice on programming. publicity. marketinQ Cine Nova. and management.AsSessinQ and monitoring grants. Film - Regional Exhibition Project Fundto 16 projects 32,100 booking and despatch. Loan of film prints and stills. in Great Britain Mainly to film theatres,film societies. media Centres. Production Division - Project Fund 242.175 2 Full time staff Research Division-Education Grants to 5 projects 37.320 Less than 1 full time equivalent. Total 2.965.165 Around 19 years of Institute staff time, estimated cost f550.000. Source: Institute records. Note: From October 1993 the responsibilities of the Planning Unit and the Exhibition and Distribution Division were brought together by an ,nstrtute reorganisatm

26 THE BRITISH FILM lNSTlT”TE

Regional Arts Boards consistently. In some cases they were aimed at funding an identified deficit or financial crisis 5.4 Appendix 3 shows the main funding to help a particular body survive. relationships for support in the regions in England. The National Funding Bodies -the 5.7 The Institute collect detailed box office and Arts Council, the Crafts Council and the financial data from Film Theatres (See Institute-have to some extent integrated Appendix 4). They hope to develop this data their systems for funding the Regional Arts and to derive performance indicators which Boards, using joint grant applications, will bcttcr measure the cultural impact at assessment and monitoring procedures. The Regional Film Theatres. Improved Institute ensure that their Education, performance indicators will also provide Production, Exhibition and Distribution better information on which to base funding decisions and will facilitate better targeting of Divisions all have the opportunity to review grants and analysis of financial crises. Regional Arts Boards’ plans and to contribute to the assessment process. 5.8 The Institute have for some time considered how best to position and develop their 5.5 From 1993/94 the National Funding Bodies regional support within the rapidly evolving require Regional Arts Boards to document and complicated funded arts sector. Their their achievements against objectives. likely level of delegation to Regional Arts Facilitated by the Office of Arts and Libraries Boards is influenced by the Institute’s and more recently by the Department of perception of the film related capabilities and National Heritage, much work has been done priorities at the individual Boards and the since 1990 to develop comparable ability of the Institute to influence and control performance indicators across the funded arts them. They are, at the same time, mindful of sector, although implementation is as yet thin. the gearing effect whereby Institute funds can The Institute are piloting some of the and do work with others’ to achieve greater indicators in 1993 with a selection of their impact. In 1992 the Institute established the clients and, in time, performance indicators London Film and Video Development Agency, should allow better measurement of the which is funded instead of the London Arts cultural impacts and value for money Board to service interests in the capital. This achieved through funding Regional Arts signals quite clearly that the Institute are alert Boards. The Institute hope to move to a to alternatives to more traditional Regional funding system based more on quasi- Arts Board relationships. contractual arrangements or service level agreements. This will be assisted by 5.9 The Institute’s desire to move towards quasi- development of appropriate performance contractual payments for services to be measures. provided by Regional Arts Boards, direct clients and Regional Film Theatres, Regional Film Theatres necessitates performance and value for money measures and indicators. Under the current arrangements, and as a prelude to future 5.6 The Institute make direct grants to 13 Regional changes, the National Audit Office suggest the Film Theatres. They alsu supply film prints, rapid implementation, evaluation and publicity materials and related refinement of performance indicators for documentation, and offer support and advice delivery in the regions and the development on programming, staffing and other activities of direct links from them to a strategy for the to a total of 46 film theatres and other future. At the same time, the National Audit specialised exhibitors including media Office consider that the Institute’s continuing centres, repertory cinemas, arts centres, 300 review of support in the regions should be film societies, schools, colleges and informed by comprehensive collection of the universities. Six full time staff, deal day to day full cost of their support including staffing with the Regional Film Theatres and maintain overheads, and analysis of that total in terms close contact with them. The National Audit of the particular strategic objectives, or aims Office found that the grant assessment and and outputs to which costs relate. Such monitoring arrangements within the Institute activity-output cost analysis would provide were operated conscientiously and further useful performance indicators and greater visibility of the resources consumed under current arrangements.

27 THEBRlTISHFlLM INSTITUTE

Views of Film Theatres in the to consider as they develop their forward regions strategy for the regions. Appendix 5 shows a summary of the survey, an anonymous compilation of which was sent to all film 5.10 The National Audit Office carried out a theatres involved. The Institute are confidential postal questionnaire survey of considering the detailed findings and their 46 film theatres receiving support from the response to them. Institute, to gather their views on the quality and range of services provided. The main areas of the questionnaire were the quality of programme-related, education and marketing Key Points services, funding and development, and the broader national impact of the Institute. The 5.14 The National Audit Office consider the theatres receive most of the services for free following to be the key points. and for many there is no realistic alternative source against which to compare the Institute. [i) The Institute provide regional support The theatres’ expectations and responses to for film, television and video activities the questionnaire must be seen in this context. throughout the UK. This is in keeping with the Department’s emphasis upon 5.11 The 36 respondents to the questionnaire (78 widening access. per cent): [ii) They make grants of about f3 million. In addition they incur staff support costs of l had a favourable view of the services about f550,OOO but these costs are not provided by the Institute and greatly formally linked to the service they valued them; support. l gave high ratings for programme related (iii) Achievements from funding clients services, the Institute’s own film directly or via the Regional Arts Boards, collections, publicity services and are difficult to assess. Work has been programme documentation; done to develop performance indicators, . wanted more from the Institute by way of some of which the Institute are piloting marketing information and support. and in 1993. but more needs to be done on especially feedback on overall sector indicators and on working level performance and trends; objectives. . thought that in their wider role the (iv) The Institute hope to move to a funding Institute were better at promoting their system based more on quasi-contractual cause with the Regional Arts Boards and arrangements or service level agreements, industry than they were promoting the These will depend on reliable measures cause at local or national government of performance. level. (v) Respondents valued the Institutes’ services, but sought more assistance from 5.12 The value placed on other Institute activities the Institute by way of marketing varied markedly: information including feedback on sector performance and trends. . around half of respondents rated positively the impact made by the Archive (vi) Three quarters of respondents would hav in their region but three quarters thought liked more opportunity to show in their that the work of the Southbank and regions the films previously screened at National Film Theatre had no significant the Southbank. impact; . three quarters would have liked more opportunities to show films or seasons previously screened at the Southbank. 5.13 The survey results could never alone support profound inferences as to the success of delivery of services but they provide the Institute with useful information and pointers

28 THE BRITISH FILM ,NST,T”TE

Appendix 1 British Film Institute performance measures (as shown in DNH Annual Report 1993)

1987-08 198849 1989-90 1990-91 1991-92 1992-93 1993-94 outturn outturn outturn outturn estimated PhS PhllS outtllm Funding (f million) 10.0 11.3 11.9 12.7 14.0 15.0 15.3 Grant as a percentage of total turnover (excluding major projects) 64 59 58 55 62 62 62 Sponsorship and private grants as a percentage 01total turnover(excluding major projects)(‘) 9 5 6 16 5.8 5.9 6.1 Earned income as a percentage of total turnover (excluding major projects) 28 39 34 34 32 32 32

Membership 01 Institute (number)c21 44.000 44,800 43,000 30,000 30,000 31,000 33,000

Media corporate membership from 1991 50 100 100

Admission to Museum of the Moving Image (million) 0.300 0.400 0.495 0.550 0.575 0.600

Seats sold at National Film Theatre (thousands) 250 211 209 196 225 225 225

Programmes booked for Regional Film Theatres 6,000 6,000 6,000 6,000 6,000 Film and video programme bookings confirmed 4,000 4,000 4.000 4,000 Aggregate sales of bookand magazine publishing (thousands) 350 371 378 462 616 799 936 Percentage of ITV output recorded for conservation 25 26 25 30 30 30

BBCAccess Service-percentagerecorded@1 90 100 100 100

Number of workshops/facilities supported 18 25 25 25 National Film and TV Archive conservation programme (feet, million) 3.0 2.675 2.225 1.475

Stills supplied by Institute Stills, Posters and Designs 78,000 75.000 65.000 50,000 Library and Information Services -Readers Ii ,000 11,000 11,000 11,000 -Telephone enquires 26,320 29,600 32,500 34.500 Source: Depatment of k?tional Heritage Annual Report 1993 Notes: 1 Figures for 1990-91 are not directly comparable with those for later years mainly because they include co-financing money secured for film groduction. While co-financino will continue this is oroiect-related. Its incidence cannot be medic&d with celfaintv in advance of develooment of oualifving oroiecfs. 2 Membership arrangements were reorganised In 1991 to provide separate categories for corporate membership. full individual membership and library membership. 3 IV&V service lntrodocedin 1990 4 Some of the figures above do not agree with Institute records because of the timing of reporting.

29 THE BRITISH FILM INDUSTRY

Appendix 2 Abstract British Film Institute financial statements 1992-93

Income and Expenditure Account for the year ended 31 March 1993

f f f income Grant from DNH 14.067.000 Income from activities 12.748.328

Total Income 26815,328 Expenditure staffcosts 9.620.872 9.229.598 Accommodation costs 1.219.395 1.348.969 Operating costs 16.085.197 14.617.085 27.125.464 25.195.670 Tangible assets acquired 3.243.330 1.625,534

Total Expenditure 30.366.794 26,821,204 (11,993) (5.876)

Balance Sheet as at 31 March 1993

1993 1992 f f f f Fixed Assets Tangible assets 21.380.541 19.312.693 Books. films and allied materials 1 1 ln”eStmentS 75.100 75,100 21.455.642 19.387.794 Current Assets Stock 384,546 205.786 Debtors 3.216.092 3.326.547 Cash an short term deposit and in hand 135.707 24,984 3,736.345 3.557.317 Creditors Amounts falling due within one year 3.758.976 3.565,955

Net Current Liabilities (20.631) (8.638) Total Assets less Current Liabilities 21.435.011 19.379.156 Major Project Fund currentassets 2.566.422 5.678.246 24.001,433 25.057.402 Represented by: Accumulated Fund 21.435.oi1 19.379.156 Major Projects Fund 2.566.422 5.678.246 24,001,433 25.057.402

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Appendix 3 Main funding relationships for support in the regions 1992-93

Department of National Heritage

Crafts Arts Council of Council Great Britain British Film Institute /

f43m fl.2m

London Film & Video DevelopmentAgency -

, r Regional Arts Boards UKFilm Clients

Scottish, Welsh and , 1 LocalA(rities 1 Northern Ireland Film Councils

Regional Film Theatres

Mote: Levels of funding for some relationships are not hnown

31 THE BRlTlSH FILM INSTITUTE

Appendix 4 Directly funded Regional Film Theatres - Funding sources and performance 1992-93

Regional Institute TOtal Cinema Cinema Operating Total Institute Institute Average Average Number Film rewnue grants and box box income income grant subsidy cinema cinema of cinema Theatre grant sponsor- office office including as % per cinema attendance ticket perfor- ship admissions cinema Total ticket sold price maws box office income

f’O90 f’llO8 f’ooo f’000 f’008 PO00 f

Bradford Film 37 79 46 22 51 130 28 1.63 37 2.43 609 Theatre Bristol Watershed 150 325 191 69 1,004 1,329 11 2.16 49 3.23 1.430 Cardiff Chapter 17 511 115 49 511 1.066 2 0.34 48 2.76 1,020 Coventry Warwick 7 511 197 77 1,316 1.827 0.4 0.10 102 2.99 760 Dartington 3 139 25 9 166 305 1 0.34 65 3.10 145 Derby Metro 11 114 50 22 66 180 6 0.51 34 2.74 630 Ipswich 19 56 ioa 44 297 718 3 0.43 51 2.90 860 Lancaster Dukes 11 601 74 35 438 1,039 1 0.31 80 2.46 439 London ICA 30 920 238 46 1,238 2.158 I 0.65 29 5.15 1,580 Manchester 135 585 302 128 1,059 1,644 8 1.05 42 2.77 3,068 Comerhouse Newcastle Tyneside 12 222 258 99 365 587 2 0.12 71 3.05 1.400 Norwich CinemaCity 40 93 120 55 124 217 18 0.72 59 2.60 926 Nottingham Broadway 57 151 183 74 202 353 16 0.77 54 2.91 1,373

Total 529 4,307 1,907 729 6,837 11,553 5 0.73 51 2.62 14.240 Source: British Film Institute, Film Exhibition records.

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Appendix 5 Institute services to Regional Film Theatres - findings of a survey by the National Audit Office

The National Audit Office sent a self-completion questionnaire to 46 Regional Film Theatres in May 1993. These findings are based on analysis of the 36 responses. The questionnaire was divided into six main groups of questions; to ascertain the range of services received by each organisation and the quality of programme related services; marketing; education; funding and development and the broader impact of the Institute nationally.

Summary of findings The proportion of respondents receiving or using the Institute services, were as follows:

100% Programming advice, booking services and publicity 78% Film tours and packages and programme related documentation 64% Institute Film Collection 56% Assistance in retailing 53% Marketing advice 50% Institute publications 0 39% Training and staff development 33% Education services and revenue funding 31% Project Funding 25% Library services

Less than 20% had used or received Gallery Exhibition Services, public relations and lobbying, production, sponsorship advice, equal opportunities advice, capital funding and advice on European issues.

Within the six sections of the customer survey the main findings were as follows:

Programme related services

75% satisfied or very satisfied with programming advice and booking services. 25% fairly dissatisfied, none very dissatisfied. Complaints mainly related to Institute’s interpretation of cultural policy. 78% rated the overall quality of exhibition services good or very good. 81% thought the Institute successful or very successful in obtaining favourable film rental prices for RFTs. 61% thought the Institute successful or very successful in securing particular film bookings to suit their requirements. 64% rated the Institute’s feedback about films and programming ideas presented at other cinemas valuable or very valuable. 83% rated the Institute’s own collection of films and videos valuable or very valuable for their programme.

33 THE BRlTlSH FILM 1NsrIT”TE

. 78% were satisfied with the quality and condition of prints from the Institute’s film collection. . 75% would like more opportunities to show films or seasOns previously screened at the National Film Theatre. Marketing, publicity and public relations . 53% rated the marketing advice given by the Institute valuable or very valuable but 30% rated it not very or not at all valuable (17% not applicable). . 86% rated the quality of publicity services and materials provided by the Institute as good or very good. . 89% thought the Institute’s advice and provision in respect of documentation for programmes valuable or very valuable. . The Institute’s promotion of the work of Regional Film Theatres was given a mixed rating; 56% considered it successful or very successful at Regional Arts Board level, compared to 54% with the film industry, 20% at local government level and 11% at national government level. Education services . 17% considered the Institute’s Adult Education Services important or very important to their organisation’s cinema programme - 26% not at all important and 53% not applicable. . 14% considered the Institute’s School Education Services important or very important to their cinema programme (32% not at all important or not applicable). . 38% found the number of Institute Training Courses, seminars and workshops were insufficient to meet the needs of their organisation. . Of the 75% who had received training by the Institute - 63% thought it was of a high or very high quality. Funding and development

l Of those receiving revenue funding from the Institute, 40% thought the assessment procedures good or very good. . 63% of those receiving revenue grant thought the feedback from these assessment procedures had been useful.

l 46% of al1 respondents thought the quality of the Institute’s feedback on overall sector performance and trends poor or very poor.

l 20% had found the Institute’s information and advice on European schemes, funding and partnership useful, compared to 41% who found it not very valuable or not at all valuable. The broader impact of the Institute nationally . 75% felt that the work of the National Film Theatre and the Museum of the Moving Image had made no significant impact in their region. . 55% felt that the work of the National Film and Television Archive had made a significant impact or srxne impact in their region.

l 42% felt additional services should be available from the Institute particularly relating to marketing information.

34 THE BRITISH FILM INSTITUTE

Selected useful Regional Film Theatre comments

. “Unable to function without Institute services”

. “more specific marketing tools required”

. “inadequate marketing data and analysis by Institute”

. “more feedback needed on overall sector performance”

. “greater liaison between National Film Theatre and Regional Film Theatres would be better for the sector as a whole”

. “publicity services and materials are one of the best services offered by the Institute”

. “the Institute library has an unrivalled collection of source material”

. “Institute has not raised the profile of Regional Film Theatres”

. “not aware of any education services”

. “the National Film and TV archive is a valuable resource that could be utilised more.”

35