ukfilm-logoThe culture department, which funds British film to the tune of £26 million each year, is preparing for savage cuts. The Department For Culture, Media and Sport faces having its budget slashed by 25% – or even higher – over the next four years. Earlier this month, UKFC told me it was drawing up plans for what 20% cuts in grant-in-aid expenditure might look like over three years. Now that looks optimistic.

Final government department budgets will be set in the October 20 spending review.

Chancellor George Osborne said department spending will be cut by £17 billion more than expected by 2014-14 because, he said, “the structural deficit is worse than we were told”. It’s the classic skeletons-in-the-cupboard tactic used when one politician takes over another’s job.

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And the video games industry has lost the tax break it was promised by the previous Labour government — which the Conservatives originally supported.

It’s all part of the kill-or-cure Budget unveiled by the Conservatives, determined to get the UK’s debt-load down before Britain implodes like Greece or Iceland.

Trade body Tiga estimated that the video game tax relief would create, or at least keep, 3,500 college-level jobs here in Britain. Staffing levels among French games developers have increased by 20% since France introduced a 20% tax break a couple of years ago.

The BBC has also lost out. Chancellor George Osborne confirmed that a tax on landline phones, proposed by Labour, to fund national broadband access, will not now happen. Instead, cash will be taken out of money Auntie had set aside to help digital TV switchover.

Personally, I think these budget cuts are a Trojan horse for the Conservatives’ political agenda, which has always been to reduce Big Government. Prime minister David Cameron has long wanted to rein in the state, which currently spends 43% of UK national income. But he knew he couldn’t get rid of all these government jobs when these are the very people whose votes he needs to be re-elected. Now the Tories can just shrug and call everything they do “unavoidable.”

Last month, the Department for Culture, Media and Sport was ordered to make £88 million of emergency savings as part of Osborne’s plans for £6.2 billion of cuts for 2010/10. The DCMS and bodies such as the Film Council were told to find savings of 3% out of this year’s budget. As a result, DCMS scrapped the BFI National Film Centre earlier this week, leaving the BFI to suck up 50% of all arts savings.