Pinewood Studios: Business Case and Economic Impact Assessment

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Pinewood Studios LtdPinewood Studios: Business Case and Economic Impact AssessmentJanuary 2013Figure 4.6: Pinewood ‘support’ tenant companies – sector breakdown (July 2012)7.4%7.4%5.6%5.6%5.6%TransportCatering5.6%3.7%ConstructionFreightCreative5.6%5.6%Creative(11.1%)11.1%On Site ServicesFinancialHealth & SafetyInsurance7.4%11.1%Financial(11.1%)On-siteservices(18.5%)18.5%MarketingNon-industrySecurityTravelproduction company employees – on an average day, taking into account the variancein number of productions, size and budget, it is estimated by PSL that there arearound 850 people employed (FTE) on-site by productions filming at Pinewood. Thiscan rise to some 1,800 people on days of peak activity;indirect and induced employment – it has been estimated from a detailed survey of firmsthat the composite multiplier for the UK screen industry is around 2.0 at the nationallevel. 56 Analysis by Oxford Economics is consistent with this Optima/CambridgeEconometrics estimate. 57 A review of ONS Annual Business Survey data for the creativeindustries as a whole also indicates that a multiplier at the UK level of around 2.0 isappropriate. On this basis, current activity at Pinewood supports a further 1,712 jobs((112+750+850)*(2.0-1)) 58 within the wider UK economy through supply chain expenditureand the spending of wages of those directly or indirectly employed.In terms of the indirect and induced impact at the other spatial areas, composite multipliersof 1.2 at the LEP level, 1.1 at the Beaconsfield constituency level and 1.08 at the SouthBucks level have been applied based on research undertaken on behalf of the Homes andCommunities Agency (HCA) 59 and BIS 60 and the responses to the tenant and productioncompany surveys. This equates to an indirect and induced impact of 342 FTE jobs5657585960Source: Optima/Cambridge Econometrics (May 2005), Economic Impact of the UK Screen IndustriesSource: Oxford Economics (September 2012), The Economic Impact of the UK Film IndustryTo calculate the number of indirect and induced jobs, the direct jobs need to be multiplier by the composite multiplier minus 1 (the totalnumber of direct and indirect and induced jobs is obtained by multiplying the number of direct jobs by the composite multiplier).HCA (2008), Additionality Guide: A standard approach to assessing the additional impact of interventions.BIS (2009), Research to improve the assessment of additionality.48
Pinewood Studios LtdPinewood Studios: Business Case and Economic Impact AssessmentJanuary 2013((112+750+850)*(1.2-1)) at the LEP level, 171 FTE jobs ((112+750+850)*(1.1-1)) at theBeaconsfield constituency level and 137 FTE jobs ((112+750+850)*(1.08-1)) at the SouthBucks level;wider employment – under the current base position, taking into account the effects of thefilm and high-end TV industries on the British box office, tourism, merchandising andpromotion/trade, it is estimated that the wider benefits associated with activity atPinewood could support a further 1,154 FTE jobs 61 in the UK economy.In relation to the wider employment impacts at the other spatial areas (the LEP,Beaconsfield constituency and South Bucks), it is not easy to determine where these widerjobs will be located. In order to be prudent, it has been assumed that all of the wideremployment is located in other parts of the UK outside of the LEP area;GVA – in total, there are currently 1,712 direct on-site jobs (112+750+850) at Pinewood,with a further 2,866 indirect, induced and wider jobs (1,712+1,154) supported within the UKeconomy. Assuming an average GVA per employee figure of £49,800 for direct jobs and afigure of £47,000 for indirect, induced and wider jobs, it is estimated that currently around£220 million of GVA ((1,712*£49,800)+(2,866*£47,000)) is generated within the UK perannum as a result of activity at Pinewood.At the LEP level, it is estimated there are 1,712 direct on-site jobs and 342 indirect andinduced jobs, generating £101 million of GVA per annum ((1,712*£49,800)+(342*£47,000)).In comparison, some £93 million of GVA per annum ((1,712*£49,800)+(171*£47,000)) isestimated to be generated at the Beaconsfield level and £92 million of GVA per annum((1,712*£49,800)+(137*£47,000)) at the South Bucks level;Exchequer contributions – on the basis of the analysis of the economic impacts of the UKfilm industry undertaken by Oxford Economics and using the estimates of employment andGVA outlined above, the Exchequer contribution per annum that can be associated with theexisting operations at Pinewood Studios is estimated to be circa £52 million 62 ; andcontribution to UK exports and trade – assuming an average export value per employee of£22,300 for direct jobs located at Pinewood and an average figure of £3,100 for indirect,induced and wider jobs (based on data provided by DCMS), it is estimated that currentactivity at Pinewood could generate exported services to the value of around £47 million perannum ((1,712*£22,300)+(2,866*£3,100)) at the UK level.4.4.2 A summary of the economic benefits that are currently generated through activity at Pinewoodis set out in Table 4.2.6162Oxford Economics has estimated that the core UK film industry supports around 43,900 direct jobs and a further 29,600 wider jobs. Theratio of wider jobs to direct jobs is 0.67 (29,600/43,900). If this ratio is applied to the number of direct jobs currently supported byPinewood (1,712), then the number of wider jobs supported will be 1,154.Oxford Economics has estimated that the core UK film industry supports around 117,400 direct, indirect, induced and wider jobs,contributing £1.35 billion to the Exchequer. The Exchequer contribution per job is approximately £11,500 (£1.35 billion/117,400). If thisratio is applied to the number of direct, indirect, induced and wider jobs currently supported by Pinewood (4,578), then the Exchequercontribution will be £52 million per annum.49
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