DIGITAL BRITAIN: Licence fee set to be channelled into local TV news

LONDON - Commercial media players could gain direct access to £130m plus of the licence fee for the first time, to finance the provision of local TV news beyond the BBC, Lord Carter's Digital Britain report concluded today.

DIGITAL BRITAIN: Licence fee set to be channelled into local TV news

However, the cash appears destined to come from licence fee money already set aside for the digital TV switchover, and the Government was careful to avoid labelling it "top-slicing".

The Government said it believes "the market alone will not provide plurality in the ownership, commissioning, editorial and production of public service content that remains essential. That is particularly true of news."

While it welcomed partnership proposals being led by the BBC to help the commercial sector provide news content, the Government warned that "in content, and especially in news, there is a question to be asked: if journalistic and editorial plurality is a key objective, how far the BBC itself can go in partnership?"

Consequently, the Government plans to consult on the formation of a new fund, derived from the licence fee, "used by or channelled through other organisations, primarily for news provision".

Under this option, from 2013, when digital switchover is concluded, and the Government's commitment - announced today, to provide broadband access for all - in addition to DAB rollout funding having been agreed, around 3.5% of the licence fee - currently some £130m - could be used to create a new "contestable" fund. The fund would be drawn on by competing news providers - potentially the likes of PA, Reuters and ITN - to provide regional news.

Culture Secretary Ben Bradshaw said: "There is nothing that says the BBC must have exclusive rights to it."

ITV has said it will pull out of providing regional news because it can no longer afford to fund it - although the broadcaster will continue to provide airtime for other organisations to supply such programming.

However, the BBC Trust reacted angrily to any prospect of "top-slicing".

BBC Trust Chairman Sir Michael Lyons said: "On behalf of licence fee payers, the BBC Trust opposes top-slicing. The licence fee has a clear aim, clear benefits, is clearly understood and has stood the test of time. Top-slicing would damage BBC output, reduce accountability and compromise independence.

He added: "The licence fee must not become a slush fund to be dipped into at will, leading to spiralling demands on licence fee payers to help fund the political or commercial concerns of the day. This would lead to the licence fee being seen as another form of general taxation. The Trust will not sit quietly by and watch this happen."

Sir Michael went on: "In particular, the Trust is not convinced of the proposal in the Digital Britain report to apply any of the [digital switchover] surplus to fund a second regional news operation. There has not yet been a full and open debate about the suggested costs of these services, and it appears the current proposals have failed to take into account potential sources of commercial funding as well as alternative sources of public funding.

The chairman concluded: "The Trust's priority now is to ensure that there is a full and considered public discussion of these proposals because they have profound implications for licence fee payers, for the BBC and for the wider industry. Licence fee payers' voices must be at the centre of that discussion, not least because our work confirms that the public have great affection for the BBC and would not support political or commercial interference which weakens it."

Separately, the Government supported calls for greater "clarity and transparency" in the relationship between the BBC and BBC Worldwide. However, it said BBC Worldwide has the potential to be "a very significant global rights business for Britain, and the Government believes it would be a missed opportunity to limit BBC Worldwide to a narrow supporting role to the BBC".

The report added that the Government believed there was a case for "greater financial and operational separation" between BBC Worldwide and the BBC, which would deliver this transparency. As such, the Government is calling on the BBC Trust to consider such separation via the sale of a part of BBC Worldwide.

But it warned that following any such move, BBC Worldwide would still have to enjoy access to BBC content on a "first-look" basis.

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