FUNDING FILM DIVISION : CONSTRUCTING A WORK PROGRAMME
When the COI was established in 1946 it was designated a non-ministerial common service department. As such it was given its own budget financed by its own Vote in Parliament. For administrative purposes COI was made responsible to the Chancellor of the Exchequer. Treasury Ministers dealt in Parliament with any questions that might arise in respect of COI. All departments, some 25 or in total at that time, were required to use the services of COI for the production of information materials, publications, photographs, exhibitions, films.
This section briefly sets out the financial structure of COI as a whole and to describe, in the case of Film Division, how the annual work programme was arrived at. That is the production programme for the 25 or so Home Departments together with the programme for the Overseas Information Services. In the autumn of each year the client Departments produced a list of film projects they proposed should be commenced or completed in the next financial year in the following April. For Film Division this would be a list that included proposals for documentary films together with short public service films (aka television fillers). It also included proposals from the Foreign Office, the Commonwealth Relations Office and the Colonial Office for documentary films, television programs and television news items to be transmitted overseas.
After discussion of the background information provided by Departments, Film Division would provide a ball park estimate figure for each project based on previous experience.
These gross provisions were broken down into individual projects as indicated below at the estimates programme for 1971/72. Thus for each project there would be an operational figure that was an estimate for the actual production of a film. Added to this figure would be a COI overhead or “on cost” figure (staff costs, buildings etc) of 10% of the operational figure which produced a “full cost figure”.
The overhead costs were a running sore in COI’s relationships with Departments. While some people in Departments (generally the more senior people) recognised that the figures were simply part of government accounting. Somehow, somewhere the cost of running the COI had to be accounted for. Others perceived the overheads as “coming out of their money” and wanted to know just how COI could justify a particular cost in terms of value added.
An example of how an annual estimate was constructed for the financial year 1971/1972 is set out below:
Film Division: Home (UK) Film Production Estimated Expenditure 1971-72 (Non Recoverable Expenditure)
Department. Film Project Estimated Full cost Expenditure
Defence
Navy Central Recruitment 9,000 10,000 Officer Recruitment 20,000 22,500 Sailing 9,450 10,500 Training: 2 films 4,500 5,000 Ratings 14,400 16,000 Nursing film: writing only 1,800 2,000
TOTAL NAVY 59,400 66,000
Army Central Recruitment 9,000 10,000 Welbeck College 14,400 16,000 Junior Entry 18,000 20,000 Special Operations 20,250 22,500 Carry in costs from 1970 4,950 5,500 Writing for 1972/73 film 900 1,000
TOTAL ARMY 67,500 75,000
Royal Air Force Central Recruitment 9,000 10,000 Engineering Officer 14,400 16,000 Skilled trades 13,500 15,000 Short public relations films 1,800 2,000
TOTAL ROYAL AIR FORCE 38,700 43,000
Ministry of Agriculture Farm Safety films: 3 21,400 23,400
Civil Service Department Writing for a film in 1972/73. 950 1,050
Education Department Research Council film c/f 10,600 Research Council 5 short films. 14,300 15,500 "Why Mathematics" carry in 1,050 1,150 "Development in Schools" 14,300 15,500 "Starting Point" 14,300 15,500
TOTAL EDUCATION 54,550 58,950
Employment Department New film:unspecified 19,600 21,000 Acquiring films from industry 1,800 2,200 Carry in costs from 1970 10,000 11,000
TOTAL EMPLOYMENT 31,400 34,200
Transport Department Film about safe driving 13,000 14,500 Cycling film: carry in costs 11,700 12,500
Environment Department Ancient monuments TV Fillers 11,850 13,000 Architectural Newsreel 4,750 5,200
TOTAL TRANSPORT/ENVIRONMENT 41,300 45,000
Home Office Crime Prevention 14,300 15,500 Fire Prevention 14,300 15,500 Acquisitions 500 550
TOTAL HOME OFFICE 29,100 31,550
Metrication Board Metrication in engineering 15,500 17,000 (Five short films) Educational film 9,000 10,000 Acquisitions 4,100 4,000
TOTAL METRICATION BOARD 28,600 31,000
National Savings Ernie (premium bonds) carry in costs. 4,700 5,200
Race Relations Board Carry in costs from 1970 2,900 3,100 Costs of prints for cinemas 950 1,050
TOTAL RACE RELATIONS BOARD 3,850 4,150
Department of Trade and Industry (DTI) Films and acquisition costs 87,400 95,600 HM Coastguard 150th Anniversary 18,300 19,650 Air Traffic Control film:writing only 1,350 1,500 Air Traffic Control training carry in 20,700 23,000
DTI Technology carry in costs 6,500 7,150 Film about Physics 11,000 12,000 Engineering film: writing only 1,500 1,650
TOTAL DTI 146,750 160,550
Scottish Office Film about social work 9,250 10,000 Carry in costs 1,250 1,450
TOTAL SCOTTISH OFFICE 10,450 11,450
TOTAL NON RECOVERABLE COSTS 538,650 585,500
Film Division Home Film Production Estimated Costs 1971-72 (Recoverable costs)
Department Film Project Estimated Full Costs Expenditure
Department of Health Nursing Careers 14,950 17,600 Film on productivity 16,400 19,300 Film on Cross infection carry in 2,700 3,150
TOTAL DEPARTMENT OF HEALTH 34,050 40,050
TOTAL NON RECOVERABLE 538,650 585,500 TOTAL RECOVERABLE 34,050 40,050 TOTAL HOME ESTIMATE 1971. 572,700 625,550
These figures do not include expenditure for the Overseas Services produced for the Foreign and Commonwealth Office. (source J Hall papers)
The equivalent figure of £625,550 in 1971 would be £9,042,325 in 2020 according to the Bank of England calculator.
The total of the bids together with the provision for the staff and overhead costs of COI became was added to the bid for the COI Parliamentary Vote in respect of the Home and Overseas Departments.
The end objective of the exercise was to compile, with all the other COI operational Divisions, a programme of work called the Medium Programme that listed all the work each Division expected to undertake in the next financial year. So far as possible every item or service was listed and costs estimated in operational and overhead terms.
During the following year the COI Divisions worked as closely as possible to the Medium Programme whose essence was that it should be as descriptive as possible of the projects covered and display the direct and indirect costs.
While this was the ideal objective, inevitably there were departures and changes during the year. Either projects were not started because of issues within departments or were started later or had other projects substituted.
In the case of the Overseas Services the production and distribution costs largely related to running services that is series of programs or news items. These costs were shown as block sums rather then individual item costs. Several examples of FCO bids are shown in the section of this account describing the Overseas Television Service between 1960-1989.
As with the Estimates for the Home Departments, plans did not always run to schedule. It was the job of the COI Finance Division to monitor progress and to be able to account for the progress of the programme in conjunction with the administration officer in each division as and when necessary.
As an example the total operational expenditure for the Overseas Television Service, that is excluding COI staff costs, for 1968/69 was of the order of £914,000 or full a cost of £1,005,000. At 2020 prices this equates to £16,900,000
The roughly equivalent figure for the Home Services, that is a Full Cost figure for 1971 of £625,550 at 2020 prices equates to £9,042,000.
However the figures for the Home Services do not include the production costs of advertising films broadcast on television or shown in the cinemas. The reason is that these costs were included in the overall costs of advertising campaigns that would also include posters or other printed materials and were managed by the COI Advertising Division. The production costs of advertising films were always very substantial but it is not possible to put forward any realistic figure on the actual expenditure. Thus the final figures should be regarded as a reasonable indicator of the size of the Film Division budget it is not actual total expenditure.
1984 and 1990: Changes in the Financial Basis of COI:
This financial structure governed the work of COI from 1946 until 1984/85. It was, very obviously, central to planning the work of the Divisions. In that year the Parliamentary Vote structure was changed so that the COI became a Repayment Department. Under the new system COI lost its Parliamentary Vote. The operational funds were distributed to the client Departments who now repaid the cost of each project, including the COI overheads, on completion of a project. Thus the costs of each project were borne on a Departmental Vote not on a COI Vote. In effect COI no longer had its “own money” but was reliant on earning its keep from the overhead costs for the projects it carried out. The saving grace for this change was that Departments remained “tied” to COI for the production of their publicity material.
Later, in 1990, the COI became an Executive Agency of government as distinct from a Repayment Agency. The effect was that Departments were now “untied “ which meant that they could decide those projects they would continue to commission through COI and those that they could commission themselves direct to suppliers. The result was that in some cases Departments decided to commission all their information requirements direct to suppliers while others continued to use COI. However it also meant that COI was free to seek work from other parts of the public sector.
Thus it will be seen that these alterations to the financial basis on which COI had operated since 1946 eventually led to an undermining of COI’s relations with a departments. In the years after the decade of the 1990s Films Division and indeed COI as a whole, was faced with a roller coaster ride as work was lost, finances had either to be suffered through staff cuts, or replaced by work from other sources.
Only at the start of the new millennium in 2000 and following a gradual reorganisation of COI did its fortunes begin to change. Throughout the period from 2000 to 2012 (when COI was closed down) the organisation grew. In the case of the use of moving pictures changing technology and the growth of social media saw considerable expansion. Vocabulary changed too, no longer was the term "documentary films" used rather "corporate videos" took their place.
The old adage of “follow the money” plotted the course of the rise and fall of COI throughout its history. For example at its inception in 1946 it had a Gross Provision of just over £4 million, which fell back between 1949 and 1956 to £1,600,000. After 1956 the COI gradually started to grow again to a Gross Provision in 1969/70 to £15,900,000***. Growth continued until 1987 when decline set in exacerbated by the change to Executive Agency status in 1990. Eventually growth commenced again in the late 1990s and continued through to 2012 when COI was finally closed. By then the COI gross expenditure was of the order of well over £500,000,000. ( source*** The Central Office of Information , Sir Fife Clark 1970)
The Internal Market
In the early 1980s, a couple of years or so after Mrs Thatcher came to power in 1979, the concept of the “internal market” was introduced into all government departments. The idea was to be able to show that all the separate parts of an organisation or division were justified by their ability to earn their way. The theme was that all areas should be run on “business” principles and the costs of each area should be separately accounted for.
Only very little help or advice was offered to COI divisional directors in support of this major change from traditional civil service practice. The requirement was to identify “cost centres” throughout each division. These were discrete areas that had identifiable costs and revenue sources that would provide identifiable profit or loss outcomes month by month leading to an annual aggregation
Eventually it was decided that Film Division consisted of nine cost centres :
Home Production: documentary films, television fillers, television commercial
Home and Overseas Production: films extraneous to programme
Overseas Television services: television programs and news services
Facility Services for foreign correspondents of overseas news services
Central Film Library (CFL Vision) : library distribution and sales
Overseas Marketing and distribution
UK Television Marketing
Film Division Technical Services
Marketing Services (otherwise Home distribution) Unit.
Each of these cost centres had cost and revenue streams against an allocated budget. Financial progress through the year was recorded in monthly reports detailing expected and actual revenue against a cumulative budget. Each cost centre had to bill either other parts of the division or departments according to work that it was requested or carried out.
Internal services such as Technical Services who rarely billed departments because the services provided were largely for use by other parts of the division. For instance the use of cinemas for viewing films attracted time charges to individual projects when viewing a film: equally the use of editing facilities or film library services.
It was a very cumbersome system, eating up clerical time. Inevitably because the system was so cumbersome a great many corners came to be cut as people attempted to minimise the amount of time consumed. If the objectives of the new system were to accurately identify precisely where all costs and income fell, the actuality was that the monthly records could only be regarded as an approximation.
Aside from the micro level the macro objective was to measure the overall performance of the division together with the performance of each section. Were each section i making a profit or a loss or breaking even.
The ideal target was that the Division broke even each year. Treasury and Management instructions were to manage affairs so that break even was achieved. Some wriggle room of around 3% either side of break even would be allowed before pointed questions would be asked of Directors.
So not only was the system cumbersome it was also very difficult to manage within the constraints of the Civil Service and the particular issues arising from a large programme of film production. Since COI by its designation was a service department that meant it was reactive to demands from departments it was not in “real control” as to the flow of work. Happily, in actual practice, memory is that COI senior management appeared not to be overly concerned with month to month figures. Their concern was with annual out turn, that could, to some degree, be managed (manipulated) when figures were posted in the final months of the financial year.
Cross sub subsidising as between revenue earning services was strictly not allowed, but by billing as much as possible to potential loss making services and also to high spending services such as television commercials, during the final two months of the financial year, the overall divisional end of year figures could be brought within the bracketed break even target.
Putting this on paper some 40-50 odd years later, the whole business looks a bit feeble, even childish. However we were attempting to carry out, so far as we could, the unrealistic wishes of Mrs Thatcher’s demands.