Item 6 on our agenda this afternoon is a debate on the Culture, Welsh Language and Communications Committee's report on film and major television production in Wales, and I call on the Chair of the committee to move the motion—Bethan Sayed.

Motion NDM7116 Bethan Sayed

To propose that the National Assembly for Wales:

Notes the report of the Culture, Welsh Language and Communications Committee on the Inquiry into Film and Major Television Production in Wales laid in Table Office on 16 May 2019.

Motion moved.

Joyce Watson took the Chair.

Diolch yn fawr iawn. In the first instance, I want to thank all the industry leaders who contributed to this particular inquiry and everybody who gave evidence. I'd also like to thank the Government for their response to the film and television industry report that we produced. The committee was fortunate to see the up-and-coming talent at the University of South Wales when we launched our report, and we were able to use the green screens there to be creative ourselves, so we enjoyed that. It was very impressive to see the number of high-profile productions and the range of jobs the students are involved in. So, well done to the students there.

There is, obviously, good reason to celebrate the success of the film industry in this country. Over the last decade, growth has outstripped that across the UK, and studios here are responsible for international hits such as Doctor Who, His Dark Materials and Hinterland. But we have to move more swiftly and react faster to the demands of industry in a more agile way, and I simply don't believe that that's happening to the best of our abilities at the moment here in Wales.

So, this report covers the whole spectrum of the industry, from funding, training, production and promotion. But I want to concentrate on funding and the Welsh Government’s approach to support for the sector, and I know that other Members will talk about other elements of the report.

Turning to the media investment budget, we are pleased to finally see the figures on the media investment budget. I understand that some of the projects are yet to reach their full commercial potential. but having waited so long for this information, it is disappointing to see that the actual performance of the fund is so far from initial projections. Of the seven projects managed by the Welsh Government, only one has recouped any money. For a total investment of over £5.1 million, only £75,000 profit has been made, and this is insufficient

The picture looks a little better if we look at the projects previously managed by Pinewood, but it still shows that less than half of the nearly £10 million invested has been recouped. It’s not a case of regretting the fact that the profits are so little after all this time. Rather, it's a shock to see the losses are so great, and I would like to understand the Deputy Minister’s view on the reality of the situation.

The media investment budget was supposed to be an investment fund, generating profits that were to be reinvested in further productions, but it was also meant to guarantee spend by major productions in Wales. The Wales Audit Office report states the intention of establishing a £30 million fund was to generate a £90 million spend in Wales. But, since 2014, only half of the budget has been spent, and it generated just over £25 million in Welsh spend.

So, I would like the Deputy Minister to set out why the investment budget has generated only 15 per cent of the Welsh spend anticipated, and what he is doing to change this particular situation. This budget, after all, has existed for five years. Something, I believe, has gone very wrong. Either the initial estimates were wildly optimistic, or the performances of the projects have been exceptionally poor. Given that concerns about the budget were first raised by the creative industries sector panel in August 2016, there has been plenty of time to learn from mistakes and put things right.

The issues with the Pinewood 'collaboration agreement' have been well documented by the Wales Audit Office and the Public Accounts Committee. Has anything changed as a result of these reports?

In terms of Creative Wales, every time I talk about Creative Wales in the sector, there's a sharp intake of breath, waiting for further details. During the growth of the film industry, the Welsh Government has had several initiatives designed to boost the sector. But stakeholders felt that this action lacked focus. Screen Alliance Wales told us that projects have been funded randomly based on the profile of the company, without looking at a long-term, sustainable legacy for Wales. Whenever the committee has asked for greater focus, we have been told this leadership will be found in the yet-to-be-established body called Creative Wales.

Since it was first announced in 2016, we are still waiting for the details of Creative Wales. We were told in February that the Minister would announce details on the form, function, preferred board members and the governance arrangements of Creative Wales in April of this year. The statement that was released in April gives no more information on any of these issues. It's filled with well-meaning phrases such as,

'Partnership and collaboration are key to successful delivery', and that Creative Wales will embrace the synergies between the economy and culture of Wales. But there was no mention of how this will be done, and the sector is asking how they can be engaged in this process and how they can bid to Creative Wales so that they can benefit from what you as a Government want to do.

So, we are now in July and we are now still waiting for the details, as promised. The Welsh Government’s response to our report says, and I quote,

'We are currently determining the governance structure for Creative Wales'.

What is the delay, because the sector are waiting and waiting? There has been plenty of consultation. We are told that,

'The Team has engaged with...120 companies, public bodies, third sector organisations and unions'.

To what end? What is the outcome of this consultation? And we need answers now. Who is leading Creative Wales? What are the governance structures? What are the terms of reference? Who are they accountable to? And how will success be measured? The lack of information is especially frustrating because the Government has chosen to accept some of our recommendations with reference to the future strategy and funding conditions of Creative Wales. But how can we assess whether our recommendations will be delivered without the details we have been promised since February? This vacuum of no decisions means that people are simply not able to understand how they apply or know where to access funds. Those are real conversations that I'm having with people in the industry on a weekly, if not daily, basis.

The frustration that the committee feels with the lack of detail in response to our report is also felt by the industry. Whilst there are individual examples of success, such as the planned partnership with NBC International, there's a real danger that momentum will be lost. Those looking to invest in Wales need to know what is replacing the media investment budget and how they can access that fund. I have been asking questions about funding and governance since the Deputy Minister came to our committee in July of last year. So, I would be grateful if he could answer our questions today.

I will end there. I know that other committee members would like to contribute to the debate, and I look forward to hearing what the Deputy Minister’s response will be. We had various recommendations on many different issues—from ensuring that we had on-screen talent quotas, which was one of our ideas; we wanted to clarify the apprenticeship schemes; and we wanted to understand what appropriate support could be given to film festivals. We are friendly in that regard. We want to see what's happening here in Wales, but we want to ensure that action now takes place so that we can realise the potential that Wales has to offer in the film industry here in Wales.

I'm pleased to contribute to this debate, although I was not a member of the committee when the report was being formulated. I have been very pleased to follow the work as it moved to publication and was then launched, as the Chair has indicated. I think it has been a very important area of work, and the report focuses on very practical ways in which we can improve film and major tv production in Wales.

I do want to start by saying that I am largely encouraged by the response of the Welsh Government in accepting most of the committee's recommendations, though I do note the Chair's frustration that some of that acceptance is contingent on the operation of Creative Wales when it is established.

I think it's right to note the growth in this sector since 2007—faster than that for the rest of the UK. Again, this has been referred to. But, there is still a long way to go. I think that Wales, as a nation, does extremely well compared to any region of England outside London and the south-east, and possibly Manchester. But, we are still well short of any proportion that was related to population, in terms of the amount of GVA that we generate through the film and tv industry. We could probably increase it by two or three times, and then only just get to a sort of rough calculation of what you'd expect by population. So, while we do have great success and we are one of the major areas for production—our creative industries have performed incredibly well over the last 10 years, and I'm sure it's a sector that will continue to grow—we shouldn't limit our ambition. We should really extend our expectations for this sector.

I think that there is a particular need to invest in Welsh language projects and Welsh language projects that can also be produced bilingually. There's no doubting the potential that we've seen fairly recently in terms of series like Hinterland, which completely normalise the use of Welsh, as well as producing a Welsh language version and a largely English one, but with the use of Welsh. I'm sure that this has done enormous good for people across the United Kingdom to know that it is normal if you are driving around Ceredigion to hear Welsh being spoken. I just think that it really was—. It lifted the heart to see that.

I also think that we should remember that it markets Wales to the rest of the world. Wales is the most distinctive cultural part of the British isles because we have a culture that is a non-English-language culture, as well as, obviously, a Welsh-English culture also and a British culture. All of these magnificent traditions mingle and are incredibly creative, and there's a great appetite out there to share in this, worldwide potentially, which is why I think some clever investment in Welsh film making is warranted. Obviously, you only get the occasional hit that makes it to the award ceremonies of the Oscars or whatever, but I think overall, at that level, that sort of creative excellence has an effect on the general sector as well, and I think we could also align it to the 'Cymraeg 2050' strategy—again, normalising Welsh and portraying our country as a truly bilingual one. So, I think that needs to be looked at, and the funding. It is the one area where we have real responsibility for projecting that aspect of the Celtic civilisation that continues to thrive in western Europe. I think more need to be seeing our drama about that.

I note that there's a need to strengthen the skills strategy. We do pretty well, as we saw when we went to the Atrium building of the University of Glamorgan, but there is still a need to improve skills, particularly relating to Welsh language output.

I also think the Government could do a bit more in terms of co-ordinating film festivals and ensuring that their worth is projected more widely. I know there's a slight difference of opinion on how that's best secured, but I think a more central, co-ordinated approach might be valuable.

Can I just end also with a plea that it's time for Creative Wales to step forward? It was envisaged in 2016, which was when the referendum on Brexit occurred, and at this rate we might get Brexit before we get Creative Wales. I'd be very happy to see Creative Wales 10 times. I'm not going to mention my attitude to the arrival, presumably when it does come, of Brexit.

I would like to thank the Chair and members of the Culture, Welsh Language and Communications Committee for their report. I had the pleasure of serving on the committee during some of the inquiry and would like to add my thanks to the clerks and all those who took part in the inquiry. It provided us with much valuable insight.

The film and tv sector is a vital part of our economy and Wales has a long tradition of producing high-quality content and being the backdrop for some of the world's most popular films. The creative industries sector is one of the fastest growing sectors in the UK. The likes of Netflix, HBO and Amazon spend as much time on tv production as some Hollywood studios do on movies.

The future of the sector doesn't lie in enticing Hollywood to come to south Wales; it lies in developing home-grown talent such as Bad Wolf. What Julie Gardner and Jane Tranter have done is truly inspirational. Wales is world-class at producing tv shows and, if we are to capitalise upon the growing sector, we need to take the right approach, learning the lessons of past failures. It is essential that we embrace the changes in the creative industries sector that have occurred in the last 10 years; essential that we move away from the old paradigms; essential that we nurture our own home-grown talents rather that entering a bidding war to entice Hollywood to Wales. We can compete with the rest by being the best. We just need the investment. We need to advertise our Welsh talent.

I am therefore grateful that the Welsh Government have accepted the majority of the committee’s recommendations—recommendations that will help us avoid making the mistakes of the past, avoid another Valleywood debacle, and another Pinewood fiasco. The challenge now is to ensure that we keep up with the changing market. As traditional studios try to compete with the likes of Netflix and Amazon, we are seeing an explosion of subscription streaming services. Even the BBC is getting in on the act. The danger with a plethora of competing services is falling consumer demand. So we have to ensure that the traditional studio rush to recreate the US cable networks for the cord-cutter generation does not damage the entire market. We must ensure that Welsh companies continue to produce high-quality content for all platforms, and we have to ensure our indigenous industries have a competitive edge by offering a low-tax economy backed by high-tech digital and physical infrastructure.

Wales is ideally placed to excel in the creative industries sector. We are small enough to be agile and big enough to bring scale. It is now up to Government, both here and in London, to ensure that we have the right conditions to support creative industries and equip future generations with the necessary skills. And we might not be able to compete with Netflix, but we can ensure that its programme line-up is full of content created or produced in Wales. Diolch yn fawr.

I now call on the Deputy Minister for Culture, Sport and Tourism, Dafydd Elis-Thomas.

Thank you very much, acting Deputy Presiding Officer, and I thank the committee for its work and the Members who've contributed to this debate here today. This report makes a number of considered and constructive recommendations on how we can better support creative industries as a Government, particularly high-end television and film production. That is why we have accepted, or accepted in principle, the 14 recommendations directed at the Welsh Government. That’s out of 17 recommendations in total. One recommendation is directed to S4C, and I'm sure they will respond to that. There are two remaining recommendations that have been rejected relating to film festivals, because mechanisms already exist within Government in this area.

As a result of Welsh Government support for the creative industries and the activity that has been engendered by the companies active in Wales, this, as we've heard in this debate, is one of the economic sectors that has grown fastest, with an annual turnover of over £2 billion, employing 58,000 people—50 per cent more than 10 years ago. Cardiff is now recognised as a centre of excellence for high-end television drama and film, and Wales has become a competitive and reliable location for creative industries and an alternative to London and the south-east of England.

Our support as a Government has played a vital role in attracting high-quality inward productions that have contributed to the local economy through spending locally. Thanks to the financial and practical assistance provided by Government, the spend in the film and tv sector in Wales has increased from over £35 million in 2016-17 to £55 million in 2018-19.

We have provided financial assistance to over 20 indigenous production projects, which are not only essential to the sustainable growth of the sector in Wales, but have also contributed enormously in helping to promote the Welsh language—as we heard from David Melding earlier—internationally over the last few years. Since 2011, the Welsh Government, along with S4C, has actively supported 15 Welsh language productions, providing more than £2.4 million associated funding. We've already heard about the international productions by S4C, such as Un Bore Mercher, Y Gwyll and Bang, which have been successfully sold worldwide.

I now want to turn to Creative Wales. Creative Wales will be charged with developing and delivering a robust strategy to support and maintain growth for the screen industry in Wales, as well as other sectors, particularly music, within the creative industries sectors. In line with recommendation 1, which we have accepted, Creative Wales will continue to promote Wales as an excellent location for film and television production, but it will also look to focus on how to develop our skills and the supply chain to an even higher standard than they are at the moment, in order to provide our creative businesses with the ability to create, which will retain and exploit the intellectual property in the Welsh economy.

Creative Wales will develop a skills strategy that will meet demand within the market. There will be timely and responsive training provision through expert providers, as well as ensuring that talents are developed by working in partnership with the relevant organisations and with specialists within the industry.

In terms of recommendation 12, my Welsh Government officials will work closely with colleagues from across Government, particularly with the Skills, Higher Education and Lifelong Learning Division, in order to support the skills agenda and to consider in detail how the screen industry can take full advantage of apprenticeship programmes provided by the Welsh Government.

As detailed in recommendation 2, there have been a number of engagement sessions held across Wales to ask the industry for its opinion on how Creative Wales can best serve the industry’s needs. Input from indigenous companies has been crucial in helping us to understand how to improve our support for the industry and to develop the highest quality creative sector here in Wales.

In looking in detail at the way that funding mechanisms for Creative Wales would work, Government officials have given particular consideration to this process. We will endeavour—and this is a commitment—we will endeavour to simplify the application process for businesses in the creative industries sector, as well as maximising Welsh spend and associated benefits for the Welsh economy and Welsh-based companies. [Interruption.] Yes.

Could you just explain to us when Creative Wales will therefore be operational? That’s the question that’s asked of me. People in the sector don’t know when it will start its work. Has it started its work? If so, how will you promote that?

The process of creating an arm’s-length body within Welsh Government is one that we have to do very carefully. I did that with Cadw, and we are following the same process in establishing Creative Wales. There will, therefore—and I’m not going to give dates, but there will be an advertisement for the role of director for Creative Wales at the very highest appropriate level within Welsh Government.  Once the director, who will be an experienced official, is appointed through an external procurement process, then there will be moves to appoint a chair. And then, once a chair is appointed, there will be a call for board members. So, I am confident that the process of completing the establishment of Creative Wales will have been completed around the same time as Brexit. And if that isn’t sufficiently clear, then I am unable to give you more detail in terms of dates, because any recruitment process depends on the response that we receive.

If I can return to recommendation 10: Creative Wales will place more emphasis on showcasing Welsh talent, and we will consider asking major drama productions to consider carrying out local auditions as a condition of funding. It appears very strange to me that people have to travel to London for auditions when they are then working in Wales.

As suggested in recommendation 11, we’re also investigating how companies in receipt of Welsh Government funding can make greater use of Welsh talents on screen. And while there has been major work done in promoting and recognising the Welsh language as an international language through Welsh productions, we must also focus on building on those successes. And in line with recommendation 7, there will be attempts to promote the Welsh language, which align with the Cymraeg 2050 strategy, and that will be a funding condition for Creative Wales in the future.

In terms of international recognition, as stated in recommendation 15, we are already working to develop Wales as an international centre of excellence, and the considerable work of companies such as Fox, NBCUniversal, Netflix and HBO in choosing Wales for their productions does prove that this strategy is bearing fruit. 

The Welsh Government takes every opportunity, therefore, to promote Wales’s screen industry and its creative talents, which are here in all major international film and television festivals, including Cannes Film Festival, the Toronto International Film Festival, Berlin International Film Festival, the American Film Market, MIPCOM, MIPTV, Realscreen, and the Annecy International Animation Film Festival. It also ensures that there are opportunities for creative talents in Wales to access support to attend those markets—and that support is all in place—and to join with all international trade missions through the support that we as a Government provide, and that support is provided by the Department for International Trade.

However, there is always room for greater international recognition. I'm sure that Creative Wales, which will be established, as I said, according to the timetable that I've outlined today, will lead to the international marketing of Wales's creative industries through the Creative Wales brand. That's the intention. I'm very keen to demonstrate that Creative England and Creative Scotland are not the same things as Creative Wales. I want the body to be seen as one that is part of Welsh Government but which can operate independently on a commercial basis. 

In accordance with recommendation 17, we have provided the expenditure figures, as you have heard. And I am pleased that the figures have been welcomed, although there were some critical remarks, as I would expect, made. We will continue to publish these figures, and I'm pleased to say that the centre in Gwynllyw—in Wentloog, not in Gwynllyw—in Wentloog truly is now making a profit.

The Deputy Presiding Officer took the Chair.

Can I ask the Minister: can he draw his remarks to a conclusion, please?

Yes, I think it's a good place to draw my remarks to a close, by celebrating commercial success in a place where some Members insisted it could never happen. 

Thank you very much. Can I now call on Bethan Sayed to reply the debate? Bethan.

Thank you very much, and thank you to the Assembly Members who had thought that this debate was important enough to contribute to. Certainly, it's very important to the economy here in Wales, but it's also very important to the creative industries. 

David Melding, thank you for your contributions in relation to the Welsh language projects. I think it's entirely important, even though the Ministers aren't in the room currently, to try and connect it with Cymraeg 2050, and how we can make sure that the Welsh language opportunities are scaled up. I appreciate that S4C have said to us in their briefing for today's debate that they are working on various films, but on the screens we haven't actually seen that materialise for quite some time. So, I understand that they have a relationship with the independent sector and that they are reliant on co-production somewhat, but we do need to see a bit more proactivity, I think, because S4C are losing out while other people are gaining. But I think Caroline Jones's point in relation to the streaming services is something that S4C are benefiting from. We're seeing the Welsh language programmes, such as Hinterland, becoming successful on those streaming services, where watching foreign films or Nordic noir, for example, is a norm, and people feel that that's something that they can engage with, and watching it in Welsh is just as normal as if they were watching it in Danish or Norwegian.

I think you made a good point in relation to the market—how we market Wales to the world. I think that that is still a challenge in how we make Wales distinctive. Yes, we have the language, but we have to be selling opportunities in relation to the places that people can come to film here in Wales, be it the mountains or the seaside—what it is better to come to do here in Wales than in Scotland. Because at the moment I'm afraid we are losing out to other parts of the UK and other parts of the world, where international companies are seeing that they would want to come here, but processes are not happening as swiftly as we would like and therefore they are moving their operations to other countries. So, I am really, really happy that the Deputy Minister has said that Creative Wales will be announced at the same time as Brexit. But then again, the goalposts might change for Brexit, and the goalposts have changed for Creative Wales a few times as well. So, hopefully it won't be thus and we will be looking forward to the launch of Creative Wales in due course.

What I didn't mention in my speech was what we mentioned in our report, which was asking for a scalable fund. We found that you had the Ffilm Cymru applications, which were small-scale filming opportunities, and then you had the media investment budget and then, in the middle, people were losing out and not able to apply for any of the funding, simply not getting to those MIB levels but, potentially, too big for Ffilm Cymru. So, I'll be looking to hear more again in the future because this isn't the end of the story about how those mid-level opportunities can be promoted for indigenous Welsh companies who want to be able to grow and to establish themselves here in Wales. I think that's absolutely fundamental.

Again, just noting quickly about the streaming services, I note that Netflix has just said that they're going to be located in London, and I think that's something that we shouldn't shun and we should try and work more with in relation to what they would be able to invest in the future here in Wales. Just because they're based in London doesn't mean that they can't come and talk to us here in Wales about the opportunities for filming. It's not just Netflix, there are lots of other streaming services that we can be utilising, but they have decided to base themselves here and that's something that we shouldn't turn our noses to.

I think it's really important just to mention the issues with regard to what Equity said in terms of having those opportunities to have auditions in Wales. This has been something that's been absolutely long-standing. I've got actor friends who've been on the train together to go for a part that's filmed in Wales but they're going to London for those auditions. I mean, it's simply absurd, really. And that's something that I'm glad the Deputy Minister has said he will look into.

Just to finish, I think what's really important is how we look at the skills potential. We acknowledged that the skills were developing, and we don't want to undermine anything that's happening in our universities or in some of the production companies, but what we did hear when we launched this report was that post-production is something that is absolutely crying out for investment here in Wales. So, while it may not have been particularly mentioned in black and white in our report in relation to post-production, we want to assure the industry that that is something that we want to look at. We heard that many women who perhaps had taken time off for maternity leave who would have been capable of doing some of those roles were losing out then when they came back into the system because they were not being provided with the upskilling necessary to do that role, and I think that's something that we all need to be aware of.

I also think that we have to be talking about recommendation 5, which refers to including

'exploring the option for requiring funding recipients to enter into co-production agreements with Welsh companies.'

And:

'The requirement to spend at least 35 per cent of the "below the line" production budget on local suppliers, cast, crew and facilities'.

We wanted to add all those different elements in because we heard evidence in some of the networking events that we had that some of these multinational corporations were bringing in crew and bringing in catering from other parts of the UK, and that's something that we really don't need to happen when we have that wealth of talent in the food and drinks industry here in Wales and also local suppliers that can become part of the procurement trail.

So, this isn't the end of the process, but I'm thankful that everybody's engaged positively with this particular report.

I hope that people can be engaged in what we're doing as a committee in the world of film in future, and realise that it's important that we don't just grow and develop talent from Wales here in Wales, but that we ensure that the world, globally, sees Wales as a location for filming, and sees it as somewhere that's positive to work in. The process needs to develop more swiftly to promote these opportunities for Wales to be seen as somewhere that's excellent to film in. With the beauty that we have in our landscape, why not come to Wales to film? It's something for us all to celebrate, and something for us all to be promoting when we meet people on the street, or when we meet businesses in our local areas as well. So, thank you very much to everyone.

Thank you. The proposal is to note the committee's report. Does any Member object? No. Therefore, in accordance with Standing Order 12.36, the motion is agreed.

Motion agreed in accordance with Standing Order 12.36.