BFI Realignment Consultation Document

The BFI has circulated a Realignment Consultation Document to its staff. The document offers far more detail about the BFI’s strategy than has previously been available, and it includes a timetable for the phased operation. The document is intended for internal discussion, but it will be of great interest to BFI stakeholders and members who use the Institute’s facilities, and whose input into the consultation process about BFI policy has not so far been invited. There is no indication that consultation with the broader group of stakeholders is on the agenda. The Realignment paper is posted here in the interests of transparency. It makes clear that the public policy statements available on the BFI web pages are significantly out of date.

Realignment Phase 1 Consultation Document

1. Introduction

We set a strategic direction in 2003 – a dynamic, ambitious and inspiring plan which focussed on:

* Archive – nurturing and nourishing the greatest collections on film in the world – both physical and intellectual engagement

* Sustaining an international focus for film exhibition in this country, through BFI Southbank, the London Film Festival and eventually a Film Centre

* Deliberately intervening to ensure the widest diversity of film and knowledge about film is available to everyone in the UK – recognising that eventually most distribution will be done digitally.

Explicit within these goals was an expectation that we aspired to remain an international cultural authority – and be recognised as such at home and abroad.

Critically to achieve any of this we needed to lift the perceived value of the BFI and what it delivered. Anthony Minghella coined it as ‘turning the BFI inside out’ – from which we now have a simple mission ‘to grow the value of cultural film’.

There is no doubt that we have achieved much and some really, really stunning achievements – starting from a renaissance in a belief in ourselves which is manifest in all the achievements and importantly recognised externally.

The profile and commitment to the Archive is completely different, it is central and vital to all we do, and we have provided national leadership through the emerging National Film Archive Strategy. We have invested in the organisational and physical care of the archive, plus made real steps forward in reaching out to new audiences through broadcast, innovative event screenings and the design and programming of the mediatheque. Through JISC and HP new monies have been brought in to further our aims. Of course, it is nowhere near enough, the Archive is a life work, but as a result of the new, high profile commitment to the Archive, new funding opportunities are presenting themselves – opportunities which simply would not have been there before.

We have changed the face and profile of the BFI and all its activities by opening a new front door at BFI Southbank. Again a really important step in showing the world in a much more comprehensive way, the value of all our activities, and our determination that the international legacy of the world renowned cultural programme is sustained into the future – and in a way which responds to today’s audience expectations. As a direct result of building the case for BFI Southbank, significant funding for a feasibility study for the Film Centre was forthcoming along with the stunning alignment of key stakeholders supporting the longer term project.

There is a soaring ambition for the Festivals – particularly the LFF where admired programming, together with critical relationship building and the marketing additionality of the headline sponsor, has attracted renewed interest which brings with it the potential of new funding support in the future.

Some stunning new initiatives have brought our distribution of film and knowledge to a large number of new audiences, from the real successes of co-productions in Mitchell & Kenyon and Friese-Greene, the archival shorts initiative, and to finally the availability online of the BFI filmographic database – which resulted in a groundbreaking deal with gracenote – which will lead to the BFI knowledge and brand being an integral part of all portable video players into the future. Furthermore, the digitisation of archive material for the mediatheque and the production of education materials for this and screenonline had contributed to our national profile, manifest in our leadership of the National Film Education Strategy

Whilst we have exceeded expectation in many, many areas, some plans have not worked as well – in spite of committed endeavour and intent. This happens in every organisation, but the key test is how we navigate ourselves around both the good and less good factors. We are not immune to ups and downs – our job is to manage both.

Looking forward the horizon is very complex – and uncertain. There are both stunning opportunities and some very, very real challenges. There are also decisions we made three years ago that we have yet to carry out.

The Governors re-affirmed the strategic direction last June (2006) – whilst acknowledging the likely challenging financial context going forward, namely:

* uncertainty about our grant in aid from Government – it has been the same for 4 years (with no inflationary link). Whilst we expected this to be the case for the first three years, we could not plan for a stand still grant this year or going forward without significant change across the BFI to be able to live within a smaller budget framework. It is now clear that this is the most likely scenario although confirmation will probably not be received until late autumn 2007 – hence our critical need to re-think and re-align now
* a continued requirement to top up our pension fund (£7-800k per annum)
* higher than anticipated utilities costs
* an uncertain commercial climate for books, DVDs and Stills sales.

Set against the opportunities presented as a result of the work achieved in the last three years:
* stronger cohesive organisation with an influential and supportive Board
* changing perception of the BFI across broad stakeholder group (with still masses more to do)
* potential capital funds for the Archive
* potential funding for the Festival
* potential support and funding for the Film Centre.

2. The Challenge

The chart below [omitted] is a visual representation of the strategic direction from our current wide and diverse range of activities to the focus on our core activities as we move towards our vision for 2012.

So this is the challenge – to push ahead with our strategic direction and explore alternative and better ways to achieve this whilst adhering to cultural values and reducing costs and financial risk.

3. Financial Situation and Process

We updated the trade unions on 7th February at the Partnership Committee on the BFI financial situation and shared the interim budget pending change

The table below [omitted] provides the year on year forecast and details how our reserves would be depleted if we did not now review what we do and the way that we achieve it, to find better ways of delivering our core activities.

Overall we have an increasing financial challenge, which we have managed successfully for the past 3-4 years. But without change, as shown, we will have a deficit next year of £2.9m rising to £3.9m in 2010/11. The need therefore is to find a reduction in our cost base of £4m net.

For those of you who attended earlier finance presentations and senior management meetings, you will be aware that a small group led by myself, with governor involvement was created in February 2007 to look at how we could achieve this difficult and complex challenge.

All activities across the BFI will be reviewed, with some common criteria:
* significance to future strategic direction and cultural priority
* potential if any of being delivered differently – particularly reducing overhead/support costs
* financial contribution to BFI and income risk involved
* potential to free up dependence on estate assets
* timing involved and funding to achieve change

We are proposing a phased approach with Phase 1 achieved by July 2007 so it is affordable.

An intense piece of work to determine the real interdependencies of support costs so as to better understand how we can reduce overheads is being spearheaded by Jeanette Wilkins.

4. Other Changes

There are other changes outside this consultation, but designed to support and move the organisation forward as follows:

a. Executive Team

Over the next 12 months for efficiency in decision making it is likely that the Executive Committee will become fewer in number. To ensure the continued and improved wider involvement of managers there will be a new formal wider group of some senior managers meeting 5-6 times a year with the smaller executive team. The timetable for this is yet to be determined, but will evolve over coming months.

b. Policy and Corporate Affairs Office

I will be creating one streamlined policy and planning team where we can make some immediate savings and ensure more cohesive support for myself, the Executive Team and Board of Governors. We are bringing together in one office strategic planning, policy, and corporate governance. This office will work closely with Nick Mason Pearson and his Communications Team. The Marketing Team will continue to report directly to myself, although I am seeking a temporary Marketing Director in the vacant position, to free up my portfolio over the next few months and so ensuring support to our trading activities.

All staff working in this area have been consulted with and the internal advertisement for someone to head up this office will be placed on the BFI Intranet this week.

5. Phase 1

a. Trading Options

Trading have faced challenging targets during the past two years. Some areas have delivered very successful and others have not performed so well. We need to evolve these areas of activity further, including looking at how we can deliver them differently ourselves, through partnership or by selling these activities to reduce overheads, but keeping our brand and its values alive.

We are looking at creative solutions which would enable BFI to deliver certain activities in different ways. We are specifically looking at Publishing, Film Sales, DVD and Stills in this context.

*We propose to remove BFI Book Publishing from the direct management and responsibility of the BFI whilst retaining the imprint and close association between BFI Books and the overall cultural programme. This will be effected by a sale, merger or outsourcing arrangement.

*The Footage Sales operation has grown significantly over the past three years. We now want to develop the operation further. It will in future fall under a new management structure within the BFI fold.

*We believe that the Film Sales operation will perform best if it is contained within an organisation that has greater critical mass in this area of work. We propose to seek tenders from third parties to take over Film Sales on behalf of the BFI.

*The Stills Collection we propose will revert to a research only facility and we will no longer engage in sales activity. Eventually, it is anticipated that the Stills Collection will move to Berkhamsted in order to release space at Stephen Street.

*It is proposed that the BFI Filmstore, which has got off to a good start since it opened in March will in future fall under the logical management umbrella of BFI Southbank.

*The BFI Membership Scheme, which was relaunched within the Trading Division and is now attaining stability verging on growth, is now in good enough state to transfer to the Marketing Team where there are obvious links and strategies.

*Sight and Sound, which remains an important part of the BFI’s cultural outreach, will be moved into a new management structure and we will work on a growth plan to secure its future. In particular we want to get a better understanding of Sight and Sound’s editorial role within the emerging BFI digital strategy through retaining editorial content in house but market testing the production process.

*Sales of BFI DVDs are already managed by a third party. We intend to engage in a re-tendering of that activity over the next few months.

*We also wish to review whether we can deliver DVDs in a different way. This includes a potential procurement tender. We plan to tender the production process for DVD to see if we can improve performance through managing the editorial and technical delivery in-house, but the production process out-of-house. Due to the value of the tender, we will need to advertise in the European Journal and as a result we will not have a clear view until September as to whether this will be the best future option.

The detail of how the above will be achieved will be worked upon during the consultation period and will involve key colleagues.

All in all Trading will look very different in the future. We want to reduce risk and support costs whilst aiming to retain our cultural profile. Dependent upon the outcome of this work there is likely to be a reduction of directly employed posts.

b. Knock on Effects

We anticipate that by delivering some activities differently, Trading as a discrete Division will cease to exist, thus making further reductions through losing associated support costs, as well as starting to build up the economies of scale to provide future reductions, once critical mass has been achieved in order to do so. For example to be considered are:

Rights and Contracts is one area where there is likely to be a reduction in workload. We need to establish the full effect and consider the overall workload in this area. However with Rachel (the manager) plus another member of staff soon to go on maternity leave, any changes may be absorbed by not back filling all the maternity cover.

In Finance two managers have recently resigned. The current plan is not to fill both vacancies.

In Human Resources, the ratio of HR staff to BFI staff is 1:77. As any organisation under goes major change HR staff numbers often need to increase temporarily before permanent reductions can be achieved.

Reducing trading activities will reduce income risk and start to reduce dependency on Stephen Street – a key strategy agreed as part of the Strategic review three years ago.

6. Phase 2

We are looking at completing phase 2 in late autumn this year. Most of what is contained within the phase 2 proposal so far is not new.

a. Library Partnership

At the end of the BFI Strategic Review in 2004 the decision was made to increase impact and revenues to BFI Collections through seeking to work in partnership with Higher Education and in so doing gain new access to higher education funding streams not otherwise available to the BFI.

Following a consultation period during spring/summer 2005, when we worked with the Chartered Institute of Library and Information Professionals to consult on this change of strategic direction, two key issues were identified:

*the key stakeholders of the BFI National Library wanted any such partnership to be with a consortium of partners, for which there could be a lead partner, but not with a single HEI partner
*there was concern expressed that the BFI needed to be clear about its vision and the role of information/ knowledge collections within that vision

Following further refinement of the BFI’s vision and strategic direction on Executive Away Days in Autumn 2005 and in February 2006, we took a paper to BFI Governors in July 2006 which outlined a vision for the BFI with Library-style learning, knowledge and information at its heart. This was endorsed by Governors. Further to this, in autumn 2006 we embarked on the Feasibility Study for the proposed BFI Film Centre and further refined our thinking for library activity within the Film Centre.

Working with our Library Steering Group (which comprises key stakeholders from the subject groups for film and media in Higher Education, the Arts and Humanities Research Council, the Higher Education Funding Council for England and the British Library), which reports to the BFI Governors Sub-Committee on Archive and Library, we refined our plans to work in partnership on the basis that we would be seeking a consortium of partners to create an innovative governance structure and we would work together with such partner(s) to develop our Film Centre. On this basis, whilst we are seeking long term partnerships for Library and Archive, we are seeking on a temporary basis, until 2012, to re-house the Library with such partner.

To this end we are now in a series of meetings with the Vice-Chancellors of 5 potential lead partners. HEFCE has recommended to us those with the most likely ‘fit’ in terms of subject specialisms, proximity to the BFI, stability of leadership, and capital plans which fit with our timetable.

The next phase of work, to be delivered by the end of June, is to develop detail on our fallback plans if a) such a partnership is not forthcoming, and/or b) the answer to the Film Centre Feasibility Study is not to take it forward at this time – in which case we need a fully worked-up Plan B.

We are seeking to secure a partner by October 2007. If a partner is not found then we may need to look at other alternatives. One may be to close (on a fixed term basis) the Reading Room. All other activities will continue. Our ability to maximise our Estate (see below) and move out of Stephen Street is dependent upon setting up a Library partnership.

A recommendation will be made to the Board of Governors in September 2007 regarding the Library moving forward.

b. Our Estate

We have previously looked at the possibility of moving out of Stephen Street and realising this asset. The BFI owns Stephen Street, with current planning permission due to expire in 2009; we need to review again if selling or leasing Stephen Street will be advantageous at this time.

Obviously we would need to find alternative accommodation until 2012 if the Film Centre goes ahead. The move is dependent upon being able to move the Library out first. Our current advice is that to maximise the potential of Stephen Street we do need to make a decision this financial year.

c. Support Infrastructure and Costs

As we reduce our activities and expenditure we shall also be able to reduce overheads, in addition to our Estate. Overheads include corporate functions such as Marketing, Communications, Finance, Human Resources, Facilities and IT.

We have currently engaged Bellis-Jones Hill, to assist with working out our true costs and dependencies of our activity base. It is planned that Bellis-Jones Hill will report back in early July 2007.

d. Further Development of DVD

Changes in the sales and marketing of DVDs are outlined in Phase 1 of re-alignment (see above). As the key drivers in these proposed changes are to reduce risk to the organisation and to reduce overheads, in Phase 2 we will review whether we can deliver DVDs in a different way. This includes a potential procurement tender, described as above. We will not have a clear view until September as to whether this will be the best future option.

7. Phase 3

We have a key responsibility to continue the momentum in pushing ahead with our strategic direction to keep the BFI viable, whilst making sure that there is enough resource to invest in development.

As we develop the plans to achieve further synergies and economies there will be further consultation. The plans will include ways to reduce further support costs and realign some activities as we move towards our reshaped 2012 vision.

Some initial work has already been done in this area and will be discussed with Governors on their away day on 6th June. A Senior Managers’ Meeting for 20th June is planned to help expand our thinking.

8. Communication and Timetable

a. Communication

I want to ensure throughout this challenging time that communication is timely and effective and all staff are aware of the timescales involved.

Through our Partnership meetings with the trade unions we will share information and discuss how we can work together to achieve the best possible outcome for the BFI and the staff. We have started those conversations and will continue to do so throughout this process. We will be meeting the trade unions on a regular basis and will review and discuss their response to the consultation paper. We also want to be able to communicate and receive feedback from colleagues within a variety of ways. To achieve this we have set up various channels, such as a dedicated email address for individuals who wish to submit their own feedback and ideas. We will also be tasking managers to have team meetings and feedback their team’s thought and ideas through their Executive Directors and will be running special events such as a Senior Managers’ Workshop on 20th June.

I am very much open to ideas and suggestions as to how we can involve colleagues and develop communication, so please do email via the feedback address or raise in team meetings any ideas you have to achieve this. Due to the timescales and pressure involved to get started on phase 1 we have not been able to involve staff as we would wish to. My plan is to improve on this for phases 2 and 3.

b. Phase 1 Timetable

The key dates:

23 May: Partnership Committee Meeting to present the consultation paper
Meetings with all managers affected by the proposal in phase 1 or who have staff that may be affected by them

24 May: Senior Managers Briefing Meeting – to present the consultation paper
Trading Directorate Meeting for all staff
Consultation Paper available to all staff via the Intranet.
All staff ‘at risk’ will have an individual meeting before the following week (if they are at work). For those on annual leave, etc, this will happen ASAP.

24 May –
22 June: Consultation Period
This period is set up to generate feedback and ideas in response to the proposal.

31 May: 2nd Senior Manager Briefing Meeting – for those away on 24th

06 June: Board of Governors Away Day

20 June: Senior Managers Workshop

22 June: End of formal consultation period

28 June : Review of phase 1 proposal against consultation feedback
Meeting with the Trade Unions and Realignment Group

Joint meeting with the Trade Unions and Realignment Group

29 June: Communicate reviewed phase 1 plan

02 July: Implement phase 1 plan

9. Support for Staff

As we work through the 3 phases it appears to be impossible for the BFI to proceed without suffering job loses. We shall, as committed to, try to ensure that these are kept to a minimum and where possible avoid compulsory redundancies.

It is estimated that in phase 1 there may be 20 post reductions (not all are currently filled). Those staff identified ‘at risk of redundancy’ will have been advised prior to the circulation of this consultation paper. Some of these posts may be involved in a TUPE transfer and therefore redundancy would not apply. Staff in affected posts will have individual meetings to discuss their position (accompanied by a colleague or trade union representative if they wish). Whilst we have staff at risk of redundancy all posts advertised will first be circulated to those at risk with a view to identifying where possible like roles, or skill sets required, that could provide alternative employment. This will continue until the end of any redundancy notice periods.

Other support will be provided such as:
– assistance with securing employment external to the BFI, including support with CV writing, interview preparation and skills, etc.
– counselling and financial advice through our employee assistance programme will be available, with extended support if required.

I do recognise that for staff identified ‘at risk’ that this is a very difficult time and every attempt will be made to support those staff.

10. How to Provide Your Feedback and Ideas

For Phase 1 the deadline for feedback is 22 June.

Managers will be encouraged to hold team meetings and to feedback comments and ideas through their Executive Directors.

If you are a trade union member (over 50% of you are) the trade unions will be holding meetings and formally feeding back their member’s views to us.

If you wish to comment as an individual – please email: with your feedback and ideas.

I do encourage you to be involved and really want to hear your views and ideas. In order to meet our challenges we do need all staff to be engaged with the process of identifying how we can best proceed into the future, to achieve a stronger and more viable BFI within our current funding framework.

Amanda Nevill
BFI Director

22 May 2007

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