UK TV Dramatists Lament Austerity Era As They Navigate Funding Crisis

British TV drama is entering its “austerity” era. That was the startling observation of one seasoned producer, reflecting confidentially on the panic among his peers since the turn of the year. Others have been more specific about a funding crisis that is the talk of Soho.

Peter Kosminsky, the BAFTA-winning director, spoke of Oscar-garlanded Mark Rylance taking a pay cut to get Season 2 of Wolf Hall made — and even then, the Tudor drama was reworked into a “chamber piece” because budgets restricted exterior scenes. Patrick Spence, producer of Mr Bates vs The Post Officetells us that the series, which feels like a sure bet to bag BAFTAs in May, would “not have been made today.” A24’s adaptation of beloved novel Shuggie Bain for the BBC has been in limbo for nearly three years as the zeitgeisty studio struggles to finance production.

The link between these three projects is that they are all British stories. Though glossy and boasting world-class talent, they are struggling to break out of a funding box because of their perceived lack of appeal to international audiences. Or perhaps more specifically, American audiences.

Money has been draining out of British TV drama for some time, but since the turn of the year, the plughole has suddenly come into sharp focus. U.S. studios and streamers have pulled back on co-productions with UK  broadcasters; distributors are stumping up lower advances; funding cuts and ad market woes have squeezed the BBC and ITV’s income; and all the while, the drumbeat of chronic inflation continues to keep the cost of production prohibitively high.

Money Drains From Market

Much of this was confirmed in a British Film Institute data dump last week. Look past the incongruous headline figure showing a 31% post-strike bounce back in film and high-end TV spending, and you see that UK producers are wrestling with acute contraction. Domestic production spending, powered by local broadcasters, plummeted by a quarter last year to £598M ($742M), its lowest level since 2020. Co-production spending on lavish shows like Sky/Peacock series The Day of the Jackal (and its rumored $1M an episode fee for Eddie Redmayne), was slashed by nearly two-thirds in 2024 to £19.6M, making up less than 1% of overall high-end TV spend.

Instead, growth in the UK market has essentially come from U.S. studios offshoring American shoots in Britain, taking advantage of tax breaks and skilled crew. So-called “inward investment” jumped by a quarter to £2.8B ($3.5B) in television, while over in film, it rose by more than a third to £1.9B. Few would deny the glamor of House of the Dragon and Deadpool & Wolverine being made in Blighty, but there is anxiety about the UK becoming a handmaiden to Hollywood.

The worry is that stories that hold a mirror up to the nation simply get squeezed out of existence. The evidence suggests this is already happening. Pact, the UK producer trade body, estimates that as many as 15 greenlit shows across the broadcasters can’t get into production because of funding gaps. Producers say they are skewing their development slates away from series they fear are destined for the shelf. Kosminsky thinks “insidious self-censorship” is already taking root among writers that will prevent British shows from even being conceived, let alone made.

“I am in hell,” says Spence, who runs AC Chapter One, the producer backed by Anonymous Content, Casarotto Ramsay, and United Agents. Spence specializes in series in the crosshairs of the crisis, not least the recently-announced ITV phone-hacking drama, The Hackheadlined by David Tennant and Toby Jones. The show was shot in secrecy last spring and Spence is under no illusions that they would have been in trouble if they had been any later. “I am having to pivot to look at other kinds of material. There’s no point in me developing more shows like Mr. Bates and The Hack because they’re unfundable,” he explains. “This is bigger than my own personal feelings and my own needs. It’s culturally devastating.”

WhatsApp Buzzes With Sound Of Workless

The trickledown of this contraction is being felt by those at the coalface. One director, who has credits on major network shows, told Deadline he has not worked for months and is considering moving abroad because there are no bookings on the horizon. When jobs do come up, the director says they are competing with BAFTA-winning peers who are taking on work they would not have previously considered. WhatsApp groups, containing hundreds of freelancers, are buzzing with talk of empty diaries. “We were trying to understand the whole ‘survive until 2025’ thing and sharing experiences. Now we’re in 2025, it’s become ‘stay in the mix until 2026,’” says a person privy to one group chat.

Again, the BFI data supports the anecdotal evidence. There were 372 films and high-end TV shows produced last year, which is 173, or 30%, fewer than in 2023. To put that in some context, there were 68 more scripted shoots in 2020 when the industry shut down during Covid. Indeed, the 372 productions last year was comfortably the lowest in at least a decade. It suggests that investment in the UK is being concentrated on a smaller number of bigger budget shoots.

So there is broad agreement about the problem. The trouble is, there is little agreement about a solution — and certainly no white knight about to ride to the rescue. That’s not to say ideas are not being considered by the industry and government ministers. They range from extending tax breaks to more radical solutions, such as a levy on Netflix and Disney+’s UK revenue. Kosminsky is a proponent of the latter and pitched his vision to the government, but creative industries minister Chris Bryant ruled it out last month when giving evidence to the British Parliament’s Culture, Media and Sport Committee. Bryant appeared more open to the idea of tinkering with the terms of trade — the rules that allow UK producers to retain their rights — to extend them to the streamers, even though this is not something on the industry’s shopping list.

Bryant told MPs that he has around five bids to extend the UK’s tax breaks and that the scheme will be kept “under review.” Big hitters are advocating for greater relief for lower-budget television drama, including Dame Pippa Harris, the Call the Midwife producer who was instrumental in lobbying for credits a decade ago, and Jane Featherstone, producer of Netflix’s Black Doveswho first revealed that shows were in funding limbo.

Featherstone wants tax breaks raised from 25% to 40% — the same level as the new British indie film relief — for specific projects produced for public service broadcasters or made out of London. Spence is also an advocate and suggests that the government appoint an individual to decide on which projects qualify for the enhanced relief. “A 40% tax break is probably the difference between a show being affordable and only around 10 a year would likely qualify,” he adds. “It’s not a huge amount of money.”

Tax Break Tangle

Others are unsure. Pact is not actively lobbying for enhanced tax relief. The BBC, in a written submission to the Culture, Media and Sport Committee about funding issues, notably did not call for specific tax credits for so-called Band 1 and Band 2 British dramas, which are valued between £1.25M and £3M an hour. The BBC does, however, want a comedy tax credit for shows that cost less than £1M per hour. Kosminsky argues that tax breaks for lower-budget series would not be enough to plug funding gaps and could drive up inflation as streaming giants swoop.

There is another thorny issue around tax breaks that is not being spoken about openly. Sources say that when the indie film tax relief was designed, the U.S. studios threatened to oppose the intervention if it was explicitly protectionist. So instead of inserting clauses that prohibited the Americans from accessing the credit, it was capped at £15M because U.S. studios do not really play in this space. In short, the likes of Netflix and Universal Pictures were excluded without being told they could not access the enhanced tax break.

“You’ve got to find the mechanism that isn’t discriminatory because it’s tax law we’re dealing with, not public policy,” says a person who was central to these conversations. “If you don’t and you put a 40% credit on high-end TV, the people who will benefit from that the most will be the Americans. People are not thinking through the consequences.”

The BFI, which plays a pivotal role in designing tax breaks, has echoed this cautious sentiment. Ben Roberts, the BFI’s chief executive, speaks of the exhaustive, years-long process that went into the indie film tax relief. He believes work of a similar order is required on high-end television. “We have never wanted to be a sector that says, ‘We’re in trouble … help us, help us.’ We always back it up with evidence and data,” Roberts told MPs last month. No one is ruling out enhanced relief, but the message from some is clear: it should not be done hastily, and it should not unsettle the UK’s successful ecology. Bryant, the culture minister, appears to agree, telling MPs: “The longer we can stick with things and not chop and change, the better.”

Sharing The Pain

John McVay, chief executive of Pact, offers a simpler solution: if British drama is a priority for British broadcasters, those broadcasters should finance them properly. “The problem is the BBC is lowballing the market, putting in very small license fees and looking to get 100% of the benefit,” he argues. “If you get stuck in limbo [without funding]the fact that the BBC won’t pay the right contribution isn’t a market failure. It’s a decision by the BBC.” The BBC will argue that it remains the biggest investor in UK content amid attritional real-terms funding cuts. And while domestic spending on high-end TV series fell by a quarter last year, per the BFI, it remains £100M higher than it was pre-pandemic in 2019.

Jimmy Mulville, founder of Derry Girls outfit Hat Trick Productions, says producers must navigate the “two-tiered system” of UK stories and lavish co-productions. “The BBC and ITV remain the most important customers, so we as producers have a responsibility to find stories that our British broadcasters can tell without the necessity of going to streamers,” he says.

Work is underway to bridge funding gaps by pulling together pots of money in a way that will be all too familiar to indie filmmakers. Those who spoke with Deadline say they have considered solutions, including filming in England and outsourcing post-production to Ireland to double-dip on tax breaks. Others have considered turning to generous tax break havens like Malta to shoot British stories, with one producer saying they had examined this option for a series about a British prime minister. These decisions are not without creative risks.

Talent pay deals will also come under scrutiny. Rylance took a cut on Wolf Hallwhile Toby Jones also reduced his fee to make Mr Bates. Other actors may be expected to do the same if they feel passionate about getting something made. The days of “cast breakage” — busting a budget for a big name — appear in decline. The same goes for crew. “The big fees aren’t going to be there for those kinds of projects, but maybe perhaps they shouldn’t be if it’s more of a public service,” says James Strong, director of Vigil and co-founder of Strong Film & Television, the company behind upcoming ITV series Majesty. “Taking a pay cut to subsidize the profit margins of a streamer or a highly profitable company is not fair. But we all have to relearn the art of making lower-budget shows that still deliver high-quality.”

Caroline Levy, a freelance producer on shows including Deadwater Fell and Silent Witnesssays content creators need to wade into the weeds of costs, be transparent about what exactly a production can afford, and stick to it. “We need our resilience more than ever,” she says.

The British TV drama industry remains five times bigger than it was a decade ago, but the readjustment from streaming largesse is real. It may be the austerity era, but producers are nothing if not professional problem solvers.