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Development bodies soldier on after RDA and tax axe

"Business as usual" says Codeworks; GameRepublic "urgently reassessing"

Regional development support networks are fighting for their survival, following dramatic cuts to UK videogame industry funding in Tuesday's emergency government budget.

The Conservative and Liberal Democrat coalition government has dropped its previously pledged tax relief for the UK videogame industry, citing the plan as "poorly targeted" and claiming the cut would save the country's troubled economy £40 million in 2011.

In addition, it confirmed plans to close the Labour government's Regional Development Agency scheme after twelve years.

"The Government will enable locally-elected leaders, working with business, to lead local economic development," read chancellor George Osborne's budget. "As part of this change, Regional Development Agencies will be abolished through the Public Bodies Bill."

Four of the country's nine RDAs have been instrumental in funding gaming innovation, advice and networking organisations in regions outside of London. Bodies such as GameRepublic and Codeworks have provided assistance to regional game developers for years. With the planned closure of the RDAs and the scrapping of tax relief, their future - and the future of game development in areas such as the North of England - is now in doubt.

''Yesterday's news is clearly very disappointing for the games industry, which has lobbied hard to secure tax relief as a means of support for the games sector," Sally Joynson, chief executive of Yorkshire-based network Game Republic, told in a pre-prepared statement, declining questions for the time being.

"The government is making tough decisions that will impact on all industries in the UK that depend on public sector support. Screen Yorkshire is now urgently reassessing how it can best continue to support the games industry in the light of these announcements. Game remains an absolute priority sector for this organisation.''

The South-East England Development Agency was not prepared to discuss the issue during the immediate aftermath of the budget, providing instead a form statement:

"The government's policy to close RDAs and replace them with Local Enterprise Partnerships is very clear. As an economic development agency our only interest is in the growth and competitiveness of the South East economy and we are committed to working with government and stakeholders to implement the required structural changes in a way that minimises disruption to business and support for growth."

There was, at least, more optimism from the North East's Codeworks, host of the annual GameHorizon conference, which is funded in part by the RDA North East One. spoke to its head of sector development (and GameHorizon conference director) Carri Cunliffe just following the budget announcement:

"Basically GameHorizon, sees it as a real shame that the games industry has not been recognised as by the government as something that this country could invest and excel in. Obviously the UK game industry, including the north east of England has a vast amount of talent and creativity unfortunately this talent and creativity is being attracted by other countries who have governments that are offering incredible incentives to their companies.

"So I suppose we're in the same situation we have been, we're now competing - or are still competing - with an unlevel playing field. Obviously the TIGA reports say that if they had have got this tax relief then they predicted there would be an increase of £457 million worth of investment over the next five years. That's lost to the country."

In reference to the planned axe of the RDAs, she said, "I think that the government had outlined in their earliest days of office that the RDAs would no longer exist, but they did say that they would be replaced by something which would offer companies continued economic support and development, especially in the North East. We're basically just awaiting further details from the government and from One North East on what they're going to do to replace the RDAs."

While the government has promised to help form Local Enterprise Partnerships (LEPs) that will assume at least some of the duties of the RDAs, their nature and resources has yet to be described in any detail. It is thought that the mayor of London's offices may take on some of the responsibilities in the capital, but the future remains uncertain for regional England.

For Codeworks at least, survival will be possible despite the loss of RDA funding: "We will try our best to ensure that GameHorizon continues as it is. And we will be announcing the GameHorizon conference for 2011 at this year's GameHorizon conference," said Cunliffe. "So it's business as usual until we have any more information."

"We value very much our relationship with One North East and we work very closely with them, and we would would very closely with whoever takes over from One North East.

"However, GameHorizon's lead by an industry advisory board, we have representatives of SCEE, Xbox, NVIDIA and it's chaired by Darren Jobling [Eutechnyx]. We work really closely with the private sector and that includes attracting sponsors to events. Obviously people pay for tickets as well, so we do have that private income.

"More importantly, people actually pay membership to be part of the GameHorizon network. We're actually announcing at this year's conference that we're opening up that to national and international people. We have survival strategies in place to ensure that if we're not going to be funded by the public sector, we will still survive as an organisation and we'll still be there for our companies.

"We're going to be here and we're going to be working very closely with the games industry to ensure that there's a membership organisation, an annual conference for games executives. "

Cunliffe asserted that the North East had seen a 20 per cent increase in the games sector over the last few years, and emphasised the important of GameHorizon in giving North-East (and UK-wide) developers an opportunity to network with some of the world's major games industry figures. "It's really about building real business relationships, actually creating value in the long run. "

Apart from Codeworks and GameRepublic, the other regional games industry bodies likely to be affected by the budget cuts are the East Midlands' EMI Media and SEEDA's South East Media Network.

GameHorizon 2010 will proceed as planned next week in Gateshead. will be reporting from the conference.

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Latest comments (10)

Lance Winter Senior Game Designer, Splash Damage11 years ago
It's a shame how short-sighted the government are being here.

If they truly do want to see an export-led recovery, then investing in a high-tech exporting industry such as game development is surely a vital first step.

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Herb Kim CEO, Codeworks11 years ago
Thanks for the article. Just to backup Carri's comments, we've known that a Conservative government would likely cut or abolish RDA's for some time now so we've been planning accordingly to ensure that the key activities of Codeworks - Connect, GameHorizon, GameHorizon Conference, Thinking Digital Conference, DIBI Conference, Gateshead Digital Summer and Digital Skills (among other initiatives) would all still be able to continue even in a post-RDA future. Like everyone else, we'll continue to look for efficiency savings but we'll be looking to keep all of our main initiatives operating into the foreseeable future. With nearly 400 paying company members we are proud of the broad-based support we enjoy from the private sector and long may it continue. We look forward to broadening and deepening our service to the private sector in a post-RDA future.

And while the RDA's will be abolished in their current form, let me tip my hat to them - in particular Simon Goon, Ian Williams & Lynsey Robinson - for putting us on a path where we could build a base of private sector support and long-term sustainability.

See you next week.

Chief Executive
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Andrew Richards CEO, Codeplay11 years ago
It would be real shame if these game bodies couldn't continue, but the future of game development in the North of England is hardly "in doubt". It's a volatile industry, so some studios may close, but others will start. The North of England has been developing a lot of games for a long time now. I don't believe all those talented people will move south. We have to hope that local government picks up the games bodies as being good for local economies.
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Show all comments (10)
Leon Green Political lobbyist & Gamers Voice Director 11 years ago
So ending the RDAs and backing out
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Quite honestly regional selective assistance (RSA) if that is abolished is no loss as it is a joke. I spent so long wasting my breath with Scottish Enterprise (read dis-enterprise) that it is not funny. Unless you are not viable its not worth applying for. If you are profitable then they don't want to support you. Britain is in a mess and I am glad Labour are out of power but George Osborne is short sighted. A tiny piece of research into Canada, Louisiana or any other territory with games credits or rebates would show as I have said for years, a proper tax credit is tax POSITIVE - ie they get more money back in the government coffers than they put out. So actually Mr Osborne, you have REDUCED your tax take by doing the usual British thing of pushing high value innovation overseas. Pity you are a Tory Chancellor - I would have thought you had a better grasp of real economics than a Labour one... Time will tell. My Glasgow studio are absolute top notch people and that studio will stay, irrespective of Mr Osborne's shortsightedness, but that is purely down to top quality dedicated people, not the government. Our headcount growth is mostly overseas due to the strangled UK costs and legislative base.
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robert troughton Managing Director, Coconut Lizard11 years ago
I'm all for a leveller playing field in terms of business support.

In the North East, grants would only be given to companies that met a long list of criteria... companies could lose out on grants by setting up in the wrong part of the North East or by not submitting their forms at a particular point during inception...

I would much rather wait and see a wider-reaching form of help (grant/tax exemption/whatever) offered down the line. One that the whole industry can benefit from.
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Michael Abraham game designer 11 years ago
is anyone really all that surprised about this? i mean they never really gave any details about the details when they made tax break promises, and surely it's gonna be one of the 1st things to go when they started looking at ways to cut spending

Edited 1 times. Last edit by Michael Abraham on 24th June 2010 4:18pm

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Bruce Everiss Marketing Consultant 11 years ago
If the proposed tax break was "poorly targeted" then presumably the identical relief in force for the film industry for over a decade will now be withdrawn as also being poorly targeted.

It really is time to shut up shop here and move to Canada, or even France!
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Fredrik Svensson Junior Programmer, Rebellion Developments11 years ago
"poorly targeted"

UK videogames revenue 44% higher than films

Edited 1 times. Last edit by Fredrik Svensson on 24th June 2010 5:04pm

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This is a interesting story. Anyone with further news on the conspirator of this anti UK tax lobbying?
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