At Sky’s new Elstree Studios near London, workers will soon be busy switching sets from the movie adaptation of Wicked to the next Jurassic Park instalment, the latest Hollywood blockbuster to be produced in the UK.

Last year alone, half of the top 20 film releases were made at least partly in the Britain, including Barbie, Wonka, Mission: Impossible — Dead Reckoning, Napoleon, and Indiana Jones And The Dial of Destiny.

But British film and TV executives say this activity puts a gloss on an industry still struggling to recover from the combination of the Hollywood strikes and financial issues hitting the UK broadcasters and US streamers that pumped money into new productions over the past decade.

“Production is recovering this year but the big streamers — which had driven expansion — are not going to get back to peak. They are all now trying to get to profitability and pulling in their belts,” said Sir Peter Bazalgette, former chair of ITV.

In 2023, more than £4.2bn was spent on film and high-end TV production in the UK, supporting thousands of jobs, but this was almost a third lower than spending the previous year.

Production is only slowly returning this year, media executives say. Winnersh Film Studios, which recently helped make Ghostbusters: Frozen Empire, went into administration last month, citing “cash flow problems” caused by the 2023 writers and actors strikes in the US. Smaller production companies are closing or selling to larger rivals due to the slowdown in commissioning.

This drop in production has been felt most acutely among those employed in the sector, many of whom work as freelancers or through fixed-term contracts based on a show or film.

A survey of more than 4,000 UK film and TV workers by media and entertainment union Bectu in February found that 68 per cent of respondents were not working, only marginally more than during last year’s SAG-AFTRA industrial action in the US.

“I didn’t work for six months which is bad — but I know people who haven’t worked for more than a year,” said Antonia Hinds, a London-based producer who recently started a new project. “We’re all experienced, skilled professionals but there are now so many people applying for so few jobs. People are leaving the industry in droves.”

She blamed the lack of jobs on cutbacks by streamers after years of big budget market grabbing expansion, and the move from linear to digital services by UK public sector broadcasters, who are seeing a slump in their advertising revenues.

Ed King, who has produced films including His House and Gnomeo & Juliet, said: “I can’t remember a quieter time in the UK in film and TV. I’ve been told things won’t start cranking up until beginning of next year.”

Even the BBC — long the stalwart of the UK production industry thanks to its taxpayer funding — has been forced to impose cuts due a recent freeze of the licence fee.

“We always felt that the return to production would be slow; six to nine months before we got back to about 80 per cent of normal levels. There will be fewer titles but not necessarily less budget,” said Sir William Sargent, founder of visual effects group Framestore. “The market will stabilise this year and grow again in 2025.”

The UK has been a choice location for movie productions and TV shows for decades, with attractive tax breaks and talented workers acting as a draw for Hollywood studios. Bazalgette said those benefits have not changed and Britain remains among the most competitive locations for filming in the world. 

Jan Koeppen, president of Disney in Europe, said: “Disney has been investing substantially into the UK creative industry for decades; spending £3.5bn here over the past five years, making major movies and series for TV and streaming and creating over 30,000 jobs in the process.”

Investors hope they are have gambled that demand will rebound in the UK in the wake of the Hollywood strikes, with hundreds of millions of pounds committed to new studio developments planned before the labour dispute began. These could deliver more than 3mn square feet in sound stages for filming, offices for post-production processes and workshops.

Sky opened 585,000 sq ft in new studio space in Elstree in September last year, and estimates that it will produce £3bn worth of movie productions over a five-year period. Warner Bros is expanding its studios in Leavesden, and is expected to create 4,000 jobs across Britain.

Shepperton Studios in Surrey has recently been expanded to house new productions from Amazon MGM Studios and Netflix, with additional 17 sound stages, 548,000 sq ft of production and workshop spaces, making it the second-largest film studio in the world.

In Sunderland, the authorities hope a planned £450mn Crown Works Studios will give the region a foothold in global film production. The developers, which have been given government funds to help prepare the site but still require planning permission, want to create one of Europe’s largest studio complexes across 20 soundstages by 2028.

Meanwhile, to the west of London in Marlow, Buckinghamshire, developers want to transform a former landfill area into film studios, creating more than 4,000 jobs. The site, which needs planning permission, is backed by director James Cameron.

Robert Laycock, chief executive of the development company behind the project, said that bespoke studio space in the UK had not caught up with the demand from the large producers. He predicted that Hollywood studios would continue to make films in the UK in a “flight to quality”.

Executives also say the UK is staying ahead of competition from other countries through financial incentives. Hundreds of millions in tax relief was awarded to the UK’s creative industries in the chancellor’s Spring Budget to encourage production, and included extra relief on business rates for studios and expenditure on visual effects.

“We will remain the production house of the world,” predicted Bazalgette, who advises the government on its creative industries strategy.

Extra funding also went to the UK independent film-making sector, a boon to executives worried that the UK will become known as a place for outsourcing for international studios rather than adding to its long heritage as a producer of its own world-leading shows and films.

But industry leaders added that the UK’s public service broadcasters, such as BBC, ITV and Channel 4, also require support to produce important, domestically focused TV shows such as Mr Bates vs the Post Office, which highlighted the plight of victims of the post office’s Horizon IT scandal.

Caroline Norbury, chief executive of Creative UK, a financier and independent network for the UK’s creative industries, said supporting the local production sector would be crucial.

“It is really tough right now. But at the same time, we are experts, and we have a global product that the international market wants and we continue to create new amazing stuff.”