Campaigners have called on the government to stop subsidising Hollywood movies after it emerged that Universal Pictures pocketed £80.5 million of taxpayers' cash to make its two Wicked fantasy films in the UK even though the studio made profits of $1.1 billion (£810 million) last year.
Headlined by mega stars Ariana Grande and Jeff Goldblum, the two movies, Wicked, and Wicked : For Good, are prequels to the 1939 classic, The Wizard Of Oz, and tell the origin story of the Wicked Witch of the West.
The blockbuster handout was revealed in recently-filed accounts by Universal and although it is perfectly legal, it has incensed campaigners as it would cover the cost of more than 1,000 GPs for a year, 6,400 hip operations or 80 MRI scanners.
The government gives movie studios a cash reimbursement of up to 25.5% of the money they spend in the UK in order to tempt them to film there.
However, critics claim that studios would do this anyway to take advantage of the high quality facilities so the incentives are unnecessary, especially at a time of financial hardship.
In 2024 a total of £534 million in subsidies was handed to film makers and Labour has committed to maintaining them despite the pressures on the public finances.
The movie industry is reeling in the returns and in February the British Film Institute (BFI) announced that spending on feature film production in the UK rose 31% to a record £2.8 billion in 2025."
These schemes should be scrapped entirely or, at the very least, tightly capped and radically rethought," says John O'Connell, chief executive of the TaxPayers' Alliance.
"Taxpayers should not be in the business of subsidising Hollywood. It is extraordinary that while tax hikes are squeezing ordinary families, a big corporation which has made over a billion in profits is receiving tens of thousands from hard-working families."
Dan Neidle of Tax Policy also questions the benefit. "The film industry says the subsidies are critical to attracting productions to the UK. That may be true. But subsidies for science, engineering or software development could also attract business to the UK. Is there actually evidence that film subsidies are value for money, and more so than subsidising other industries? Or is it more that movies have better lobbyists and way more glamour?"
Even the government has admitted that the film industry is a niche sector. When it increased the level of reimbursement in 2013 it noted that "this measure is expected to have a positive impact on the film industry, but is not expected to have significant wider macroeconomic impacts."
It has however made the UK a magnet for Hollywood studios with the big five - Disney, Universal, Paramount, Columbia and Warner Bros - all shooting films there.
This creates jobs and there were more than 3,500 staff on the Wicked movies alone. It also drives trade for UK businesses such as security, catering and prop-making firms. Universal made the most of this as it built spectacular sets for the Wicked movies at Sky Studios in Elstree and on location in Buckinghamshire.
Its creations included a full-size art deco train, an actual yellow brick road and a 19 feet-high rotating library. It came at quite a cost. The budgets of films made in the US are usually confidential as studios combine the cost of them in their filings and don't itemise how much they spent on each one.
It is a different story in the UK. In order to get the reimbursement, at least 10% of the movie's core costs must be incurred in the UK and to demonstrate this, studios typically set up separate production companies for each film.
Their accounts lift the curtain on the spending. It takes a bit of detective work to get to the bottom of this because the companies have code names so they don’t raise attention with fans when filing for permits to film on location.
The Universal subsidiary behind both Wicked movies is called Western Sky limited in a nod to the Wicked Witch's home.
Its latest accounts are for the year to end of February 2025, by which time the vast majority of the money had been spent on the movies. The accounts show that they cost a staggering £413.6 million with £42.2 million spent on staff alone.
However, the subsidy reduced the spending to £333.1 million which had a magic touch. Studios typically receive around half of the cinema ticket sales and the two Wicked films made a total of £1bn. It gives Universal a profit of around £167 million and that really is the happy ending it was looking for.
DCMS and Universal were approached but neither provided a comment.
