The UK is facing the loss of its independent movie business, leading film-makers have said.

They say that the financing model of the past 20 years is broken and that making Oscar-winning films such as The King’s Speech and Slumdog Millionaire has become all the more difficult. The film-makers believe that, while homegrown casts and crews are working instead on Hollywood and overseas productions, the increasing dominance of US online streaming platforms will drive up costs further and ensure that stars on whom they rely to attract crucial financing are even less available.

Last week, in a boost for the UK’s status as a centre for film and TV production, Netflix announced that it was setting up a permanent production base at Shepperton Studios, spending more of its $13bn (£10.3bn) annual production budget in the UK. The news came as Disney joined studios planning rival streaming companies with their own productions. Before launching Disney+, it has pulled all its content, including the Toy Story franchise, from Netflix in the US.

The British film industry after Brexit: ‘We’re going to throw it all away’ Read more

Andy Paterson, who co-produced The Railway Man, the acclaimed second world war film starring Colin Firth and Nicole Kidman, said others would follow and that, although British film-makers were benefiting from the streamers, there was a limit to the number of subscriptions that the public would buy.

He predicted a “streamer war” that would take its toll on the independent sector.

Paterson said: “There’s going to be a massive war between those platforms over the next two years and then, inevitably, a consolidation. But, if during that time, we lose the independent film business in this country – which is going to happen unless we make big choices – then in three or four years’ time there will just be a few American-dominated platforms that control all creative content.

“We’re all making films and series for the streamers. We’re not for a second saying we don’t love that … It’s an awful lot easier to make movies for Netflix, where they pay for it, than it is to bring 50 different bits of money together to make The Railway Man. But, without some intervention to ensure that the indigenous films still get developed and made, you end up having a new set of studios dominating the world.

“I am passionate about producing, but I am horrified at the way this country develops and treats its producing talent. We’re becoming an industry focused only on servicing the colossal range of inward investment films and TV series attracted by the tax credit, the dollar and working here, or making the very low-budget films from emerging directors, which are really all the British Film Institute (BFI) and BBC Films can afford to do.”

He said the UK would look back within a few years on how it destroyed the independent film sector, depriving cinema audiences of original and diverse films in which the UK has always excelled.

He is calling for a shake-up of the industry in a world after the Brexit vote, where everything is changing, saying: “Are we going to let British creators just work for America?”

His concerns were echoed by Rebecca O’Brien, producer of Ken Loach’s films, who said: “I’m quite pessimistic for the independent sector at the moment.

“I certainly see a decline … The success of the inward investment business, which of course the industry is delighted to have, because it keeps strong employment is definitely a problem for the independent sector, who can’t pay so well.

“When you’re crewing a film, it’s really quite difficult to find people … People that we work with might be employed for up to nine months on a studio production and they have to commit to it because independent productions are rare … So it does begin to drill a hole in our ability to keep the sector going.”

Gabrielle Stewart, the managing director of HanWay Films, whose productions include Ralph Fiennes’s Rudolf Nureyev drama, The White Crow, said: “It’s a lot tougher right now.”

Beyond tax relief, which provides about 20% of a production budget if the entire film is made in the UK, British producers have traditionally competed for public funds from the BFI and BBC Films and for a UK distributor to put a substantial guarantee against UK revenues.

Paterson said: “£11m for BBC Films and about £15m for the BFI. These are pathetic numbers compared to the billions that Netflix and others spend. We don’t need to spend that level of money to compete because we’re really good at making films … Audiences want films in their cinemas that are not just more of the same.”

A BBC Films spokeswoman acknowledged that its budget was small, but said it was used judiciously, supporting both new and established film-makers.

Ben Roberts, the deputy chief executive of the BFI, said the independent film sector remained buoyant, with plenty of actors wanting to fit those productions into their schedules.

Noting “the incredible energy” of the inward investment sector, he said: “I’m naturally more optimistic. We see a lot of work coming into us as an open access funder every year. It would be a shame to paint a picture of negativity.”