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UK Film Industry Faces Challenges Amid US Production Shifts

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Frank Mannion Published September 14 2026 Jump to comments section Print this page Stay informed with free updates Simply sign up to the Film my FT Digest -- delivered directly to your inbox. The writer is a film producer and academic and author of ‘The Dependent Film Distributor’When Bob Kane and Bill Finger created Batman in 1939, they hardly expected Liverpool to one day double as Gotham City. But it did, in Matt Reeves’ 2022 film The Batman.

Spider-Man creators Stan Lee and Steve Ditko would have been equally astonished that Glasgow stood in for New York in this year’s global hit Spider-Man: Brand New Day. America’s superheroes, in other words, have gone British. The question is whether it will stay that way.

Hollywood has long been the movie capital of the world but, over the years, production has shifted overseas. At its late 1990s peak, 262,000 people worked there; by 2024, this had dwindled to 100,000. “Runaway” production, as it is known, is such a problem that California governor Gavin Newsom recently said Hollywood was “on life support”. One big beneficiary has been the UK, or “Brollywood”.

It now has an off-screen workforce estimated at 244,500, many of them dependent on US films made in Britain. The introduction of movie tax reliefs in 1997 kick-started this growth. By 2000, Warner Bros was filming Harry Potter and the Philosopher’s Stone in a disused aerodrome in Leavesden, not far north of London.

In 2004, a young British director, Christopher Nolan, with a cast led by British actors Christian Bale, Gary Oldman and Michael Caine, started making Batman Begins, then The Dark Knight Rises, in the UK. The films attracted millions in tax relief and Warner Bros became one of the industry’s biggest investors in the UK. An increase to the tax credit in 2014 was heralded by then UK chancellor George Osborne on the set of Star Wars: The Force Awakens, where the self-confessed fanboy posed with R2-D2.

Disney even thanked him in the end credits. Osborne tweeted “another #Star Wars film will be made in UK. A #Long Term Economic Plan in a galaxy far far away.” This brought in the US-based streamers and Marvel films, including Deadpool & Wolverine and Avengers: Doomsday, which were shot in Britain as well as Netflix’s The Thursday Murder Club and Narnia: The Magician’s Nephew.

But lately there are some ominous signs. Donald Trump said this month that he wanted to bring the industry “BACK TO AMERICA” and would support a federal tax incentive to do so. At the same time, the British Film Institute recently reported that spending on UK film and high-end TV production was down 15.6 per cent in the first half of 2026 compared with last year.

This is in spite of a 2024 increase in UK audiovisual tax credits to between 25 and 40 per cent, depending on qualifying spend. The British film industry would be running on fumes without this support. British-based film producers may be described as independent, but they are, in fact, dependent: on stars, subsidies and streamers — with Netflix alone spending $1.5bn annually on British film and TV production since 2020.

And at the lower-budget end, they depend on funding from the likes of the BFI, BBC, Film4 and private equity. Like many UK producers, I actively only produce films that qualify for the tax credit. The concept of independence is therefore a misnomer.

The industry also faces a significant threat from Ireland and EU countries, as well as Australia and individual US states (such as Georgia), all of which are now offering competitive tax breaks. This strain is starting to show in some places. Netflix recently announced a $1bn investment in a new production studio in New Jersey, signalling a shift back to local US production after the state enhanced its movie tax breaks.

CEO Ted Sarandos admitted that it moved seven productions to New Jersey that it originally intended to shoot in Britain. UK film crews are also fretting about AI hollowing out the country’s vibrant visual effects industry.