EXCLUSIVE: The UK government is considering handing over the £15 million of lottery film production cash, which the UK Film Council currently handles, to public broadcasters the BBC and Channel 4. Ed Vaizey, the government arts minister, has talked about splitting the UKFC’s £15 million of lottery funding only recently. He argues that both broadcasters both fund the same kind of films. One UKFC insider I spoke to today described this as an “appallingly dumb” idea. “It may have come up now they are desperately scrabbling around for something to do with film money,” this insider tells me.

Even if BBC Films and Film4 go with the plan – and both complain that they’ve long been starved of funds – what’s to stop Auntie BBC and Channel 4 from just cutting their annual budgets as a result? BBC Films currently receives £12 million a year, while Channel 4 has just had its budget increased to £10 million annually. Producers would also likely howl as it further reduces the number of gatekeepers from three to two.

Department for Culture, Media and Sport tells me nothing has been decided yet. A detailed implementation plan will be worked out over the summer. But DCMS is considering options to transfer these funds to other existing bodies. There’s been talk of the British Film Institute handling the lottery production cash through an arm’s length commercial body — much like the arrangement BBC has with BBC Worldwide. I’m told that legal issues preventing the BFI with its Royal Charter and charitable status administering lottery money have been ironed out. Another option might be to transfer the £15 million over to government trade department BERR as part of an innovation fund.

Of course, it’s ironic if all this lottery money ends up being administered by another British Screen-style discretionary funding body. British Screen was the organisation that the UKFC replaced in 2000 to dole out the film subsidy. At the time, I was assured there was no reason why the UKFC wouldn’t exceed British Screen’s average recoupment rate of 50p in the pound. In the end, UKFC’s recoupment rate has turned out to be roughly the same. And that’s the highest recouping rate out of any European film subsidy body.

I know that indie producers have talked about making the whole system automatic. Producers would be awarded on the basis of how well their previous film performed. But lottery funding rules mean that any awards have to be discretionary. The government would find it difficult to prevent big Hollywood movies like Bond or Potter from hoovering up automatic cash.

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