Pinewood Studios: Business Case and Economic Impact Assessment

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Pinewood Studios LtdPinewood Studios: Business Case and Economic Impact AssessmentJanuary 2013indirect, induced and wider job creation (and protection) – as well as direct employment,jobs and economic activity will also be supported through:indirect impacts – supply chain expenditure associated with activity on the Pinewoodsite supports employment within the local and wider UK economy. This will increaseas a result of the proposed project through the generation of additional demand forgoods and services;induced impacts – those directly or indirectly employed via activity on the Pinewoodsite support further employment in the local and wider UK economy through theirpersonal spending on goods and services. This impact is again expected to increasedue to the PSDF; andwider economic impacts – there are a number of wider economic catalytic impactsmore generally associated with the UK film industry and high-end TV, such as theeffect on the British film box office, UK tourism, promotion and trade, andmerchandising opportunities. 46 The impact of film and television on tourism, forexample, is well recognised, with high profile films, including those produced atPinewood, helping to increase visitor numbers and establish and/or promote specificattractions. Films, television and video games also support employment in the retailsector through sales of merchandise, such as DVDs, Blue-ray discs, music downloadsand games. The increase in productions at Pinewood that will result from the projectproposals is expected to create further employment opportunities via these widereconomic impacts.Gross Value Added (GVA) contribution – through the creation of additional employment andactivity, the PSDF will increase the economic contribution of Pinewood Studios to the localand national economy, as measured by its GVA impact. GVA is used in the estimation ofGDP, which is a key indicator of the state of the whole economy (comprising GVA plus taxeson products less subsidies on products);Exchequer contributions – activity on the Pinewood site and the associated indirect, inducedand wider effects will generate tax receipts to the Exchequer, including corporation taxpayments, income taxes and national insurance. The proposed project will increase direct,indirect, induced and wider economic activity and therefore result in higher tax receipts;contribution to UK exports and trade – the UK film and TV industries are significantcontributors to the UK net trade position, as is the creative industries sector as a whole. TheUK film industry, for example, earns significant export royalties and fees for the productionof films. The larger number of productions at Pinewood that will be facilitated by theproposed project, as well as greater levels of wider economic activity, is expected to lead toincreased exports and trade; andwider socio-economic benefits – in addition to the economic impacts outlined above, thePSDF will generate a range of wider socio-economic benefits, including the cultural benefit46See, for example, Oxford Economics (September 2012), The Economic Impact of the UK Film Industry40
Pinewood Studios LtdPinewood Studios: Business Case and Economic Impact AssessmentJanuary 2013of supporting the British independent film sector, education and training opportunities,community benefits, clustering and agglomeration, and innovation.4.3.2.4 The economic and wider benefits of the PSDF that have been assessed as part of this report aresummarised in Figure 4.2.Figure 4.2: Assessment frameworkEmployment effects- Construction employment- Direct employment:• Pinewood Studiosemployees• Production staff• Tenant companies- Indirect employment- Induced employment- Wider employment:• British box office• Tourism• Merchandising• Promotion and tradeContribution to UKeconomy- Gross Value Added- Exchequer contribution- Contribution to exportsWider benefits- Skills, education & training- Cultural benefits- Innovation- Clustering & agglomeration- Social diversity & inclusion4.3.3 Assessment methodology(i)Baseline assessment4.3.3.1 In order to establish the baseline economic position, the current impact associated withPinewood has been assessed. This part of the assessment has sought to draw out the scale ofeconomic benefits currently being generated in terms of jobs, GVA, Exchequer contributionsand contribution to exports. The methodology used to estimate each benefit was as follows:direct on-site employment – there are three main sources of on-site employment:employees of Pinewood Studios; tenant companies and their employees; and productioncompanies and their employees. Data has been provided by PSL in terms of the currentnumber of Pinewood employees. PSL has also provided an estimate in terms of the numberof employees within tenant companies. This estimate has been cross-checked against theresults of the tenant survey undertaken on behalf of AMION. The total number of peopleworking on productions based at Pinewood will vary depending on the number, nature and41
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