As the cost of major series swell to £1m an episode, producers are being forced to film in other countries
It was a lack of cash that finally sank the dreams of the makers of the TV drama Titanic to film in Belfast, the port where the original vessel was constructed.
So, after many months of dithering, the producers of the £12m-£13m ITV project moved to studios near Budapest, specifically to take advantage of landlocked Hungary's generous tax breaks.
Nigel Stafford-Clark, the veteran producer and creator of the series, said: "We had really, really, wanted to film at Harland and Wolff, Belfast, but it proved financially impossible."
Over in central Europe, it was cost-efficient for the production team to build a vast water tank, making the drama at the same time that the BBC was filming the first world war drama Birdsong nearby.
The story, though, looks like it is about to change. Last Friday's news that the government is preparing to introduce tax subsidies to encourage more TV dramas to be made in the UK, was called"a game changer" by the Titanic team – exactly the type of production the UK has to fight to retain.
Although the concession has been dubbed the Downton Abbey credit, Julian Fellowes set his period drama in a real English country house, Highclere Castle. Export to a tax haven was never an option.
But with Titanic, also written by Fellowes and backed by ITV, the location hung in the balance for months. Last summer the 80-strong cast of mostly British actors, headed by Linus Roache, worked alongside Hungarian technicians and extras to film. Roache said the hardest part was acting freezing cold in a boiling hot mid-European summer.
Meanwhile, Stafford-Clark is certain the changed rules will also encourage more non-British productions to come here, as with films, to take advantage of the TV and film talent base. "In feature films, it is widely recognised we have the best talent in the world – look at the Harry Potter films," he said.
Simon Vaughan, Titanic's financial deal-maker and producer, who set the television project in motion four years ago, added: "As an industry we are about to see a golden age of drama ushered in here" that will more than match the value of the subsidy. Vaughan believes that while shooting drama in tax-efficient South Africa, Hungary, the Czech Republic or Dublin had reaped many benefits, it remained inconvenient, and caused problems for actors and crew. "It will make it easier for top talent to commit to long-running series."
His West End company, Lookout Point, is helping to finance two prestige projects for the BBC, with US cable partners, outside of the UK because it is currently too expensive to film here. They are Ripper Street, a £12m period drama series shooting in Dublin about policing in the East End of London in the aftermath of Jack the Ripper, made by the UK independent Tiger Aspect, and Parade's End, based on Ford Madox Ford's novels and adapted by Tom Stoppard. "In all three cases [including Titanic], they could have been made here."
The chancellor's tax break proposal is recognition that big British TV drama series, with international appeal, have become almost as complicated and tortuous to finance as movies, and need similar tax treatments. The BBC and ITV can no longer write big cheques. Stafford-Clark, whose credits include Warriors, The Way We Live Now, Bleak House, and The Passion, said he gave up making films because of the tortuous financing in favour of television 10 years ago but now: "That decade has come to an end. It's a new world."
British drama is dividing into categories, with soaps and weekday serials existing on pegged or reducing budgets, with broadcasters buying a licence for everything else. Pippa Harris, the director of Neal Street Productions, believes the budget proposal will make a significant difference. She is making four Shakespeare dramas for the BBC. She said: "We really struggled to keep them here. We had a deeply depressing trip to the Czech Republic trying to convince ourselves we could find a Palace of Westminster there. Ironically, in the end, we were saved by NBC Universal, who invested, topping up the BBC licence fee."
Paying £1m for an hour of TV drama is the maximum any UK broadcaster can afford. ITV paid for 35% (£4m) of the costs of Titanic as its co-producer. Two funding partners came in: Germany's ZDF, and the US network ABC. Pegged to the centenary of the ship's sinking, 12 April, the drama was then sold to 86 countries.
Under the new concession, 80% of the core production spending (minus development costs) would receive a tax credit from the Treasury of 25%. So it is possible to raise 50% of production costs from a combination of the broadcaster and the tax man, meaning UK creative control.
It wasn't enough to save Titanic – the second time around – but it does offer hope for the future of big-budget British television drama.