Film and TV Production Restart Scheme Contingent Liabilities

It is normal practice when a Government Department proposes to undertake a contingent liability in excess of £300,000 or for which there is no statutory authority, for the Minister concerned to present a departmental minute to Parliament, giving particulars of the liability created and explaining the circumstances.

I am tabling this statement for the benefit of all Members of this House to bring to their attention the departmental minute issued today that provides the House with notice of a contingent liability created by my Department. This is in relation to the Film and TV Production Restart Scheme, for which Parliament approved substantial budget cover at supplementary estimates in 2020-21.

The Film and TV Production Restart Scheme was announced by the Government on 28 July 2020 and supports film and TV productions across the country that are at risk of being halted or delayed due to an inability to obtain covid-19 insurance. HMG has established a discretionary compensation scheme which will provide cover for losses associated with certain covid-19 related delays including civil authority restrictions and cast losses. Cover is available to purchase for an additional premium. The duration of the cover is from July 2020 to 30 June 2022.

The scheme provides cover for up to £500 million in claims with a current maximum contingent liability of £732 million. This figure is based on the abandonment of all productions using the scheme, an extremely unlikely scenario. The amount will increase and decrease as productions come on and off the scheme. While the contingent liability is theoretically unlimited, to retain control of the fiscal risk, the terms of the scheme allow DCMS to close the scheme to new registrations and/or review the value of the scheme limit, if it determines that the aggregate value of estimated claims payable is nearing the scheme limit of £500 million. Our internal central estimate of costs is significantly below this figure.

It is normal that any contingent liabilities should not be incurred until 14 sitting days after Parliament has been notified of the Government’s intention to incur a contingent liability. There is an exception in cases of special urgency. This is one such occasion.

This policy was developed and implemented at great speed in a time of emergency, while the Department was also delivering other innovative support packages. In order to make timely progress, it was necessary that production companies were certain of DCMS’s funding commitment in order to restart immediately, as DCMS worked on implementing the scheme. While Parliament was informed via the significant budget cover secured at supplementary estimates—which would more than cover the likely costs—a procedural oversight which has only recently come to light has meant Parliament was not informed of the theoretically unlimited contingent liability.

I note that DCMS’s work on the Film and TV Production Restart Scheme has contributed to the remarkable bounce back of the film and TV sector, with first half-year spend estimates topping £3 billion, and that the scheme has now supported more than £2.4 billion of production spend and secured over 80,000 jobs on set. Given this success, I hope the House is in agreement with my assessment that to delay signing the aforementioned agreement would have been inappropriate and to the detriment of the beneficiaries of the scheme.

A copy of the departmental minute is being placed in the Libraries of both Houses.

[HCWS397]