Jeremy Hunt will slash studios’ business rates and prop up councils set to lose out as a result of this decision.

Sky Studios Elstree and Warner Bros Studios Leavesden are among the studios which could pay less into councils’ coffers.

The Chancellor named these two Hertfordshire companies – and Pinewood Studios in Buckinghamshire – in his 2024 Budget speech before the House of Commons on March 6.

Business rates were due to skyrocket at major studios under previous arrangements.

The Valuation Office Agency (VOA) recalculated “rateable values” in 2023 – the figures which authorities use to calculate how much a company should pay in business rates.

These values shot up by 360 per cent at Warner Bros Studios Leavesden near Watford and 372 per cent at Elstree Film Studios in Borehamwood.

Watford Observer: The chancellor announced the tax cuts in his budget speech this week.The chancellor announced the tax cuts in his budget speech this week. (Image: PA)

“We have become Europe’s largest film and TV production centre with Idris Elba, Keira Knightley and Orlando Bloom all filming their latest productions here,” Mr Hunt told Parliament.

“Studios space in the UK has doubled in the last three years and at the current rate of expansion, next year, we will be second only to Hollywood globally.”

The Conservative MP for South West Surrey added: “Having worked closely with the culture secretary (Lucy Frazer MP) and listened carefully to representations from companies like Pinewood, Warner Bros and Sky Studios, we’ll provide eligible film studios in England with a 40 per cent relief on their gross business rates until 2034.”

According to Budget documents, the relief is worth around £470 million over the next 10 years.

Councils “will be fully compensated for the loss of income as a result of this relief and will receive new burdens funding for administrative and IT costs”, HM Treasury has confirmed.

Watford Observer: A CGI of Sky Studios Elstree's possible expansion, it will see cuts to the business rates it pays.A CGI of Sky Studios Elstree's possible expansion, it will see cuts to the business rates it pays.

Some firms are already entitled to business rates relief, including local newspapers with offices, some small businesses, restaurants and amateur sports clubs.

Companies may also be entitled to transitional relief if their bill has changed.

Studios valued at £100,000 or more could receive a 30 per cent relief in 2023/24, so bills rise gradually.

‘We’re delighted the Chancellor called ‘cut’ on business rates’

Sky Studios Elstree has a rateable value of £29.9m.

Using standard multipliers, the company would expect to pay £15.3m in business rates.

A company spokesperson told the Local Democracy Reporting Service the firm has had conversations with the VOA in a bid to address this sky-high figure.

Reacting to the Budget, Sky CEO Dana Strong said: “We’re delighted that the Chancellor called ‘cut’ today on TV and film studio business rates, providing vital tax relief to enable the UK’s world-class film and TV production sector to continue to thrive.

“Today’s announcement brings confidence to the sector, unlocking job opportunities whilst providing a stable foundation for the investments of tomorrow in the UK, such as our proposal for Sky Studios Elstree North and the filming of NBCUniversal’s Jurassic 4.”

The company is yet to receive planning permission for its northern site between Rowley Way and the A1, and Hertsmere Borough Council is due to make its decision in May this year.

Jurassic World 4 would become the next instalment of the Jurassic World series, which previously featured A-list actors Chris Pratt and Bryce Dallas Howard .

Ariana Grande and Cynthia Erivo star in the on-screen adaptation of the hit Broadway musical Wicked, which was filmed at the Borehamwood studios.

Studios announcement ‘welcome’ amid Three Rivers uncertainty

Elsewhere in the county, the rateable value at Warner Bros Studios Leavesden rose from £5.5m to £25.3m.

The company has plans to expand its site, which was the production base for Barbie starring Margot Robbie and Ryan Gosling and the Harry Potter film series which launched the careers of Emma Watson and Daniel Radcliffe.

Three Rivers District Council, which includes Leavesden, approved its own 2024/25 spending plans in February but finance director Alison Scott warned politicians “the council is exposed to significant appeals risk”.

She warned just one successful appeal could “wipe out business rate growth in the council”.

Councillor Sarah Nelmes, Three Rivers’ leader, said: “We welcome the measures for film studios in Hertfordshire.

“We are very pleased. It means we are in a better financial position than thought we might be.”

The Liberal Democrat councillor for Penn and Mill End added Hertfordshire’s film industry makes an important contribution to the nation’s culture and economy.

In addition to business rates relief, Mr Hunt has promised to roll out a new UK Independent Film Tax Credit at a rate of 53 per cent for films with budgets below £15 million.

Cllr Nelmes said: “The relief for independent films is very welcome.

“It is overall favourable because independent film is a very important industry for Hertfordshire.”

Holywell councillor Matt Turmaine, Labour’s MP candidate for Watford, said: “The Tories have devastated the creative industries in the UK.

“Just look at the live music scene.

Watford Observer: Holywell councillor Matt Turmaine.Holywell councillor Matt Turmaine. (Image: Watford Labour)

“The film studios across Hertfordshire are vital to our local and national economy, so we welcome this belated support.

“A Labour government will back British business with a new industrial strategy to maximise Britain’s strengths in the creative industries.”