Select Committee Announcement

6 April 2010

MPs highlight crisis facing local and regional media

Report calls for OFT investigation into impact of local authority publications

The Culture, Media and Sport Committee today (6 April) releases its Report, Future for local and regional media. The Report examines the current state of local and regional media in the UK, and makes a number of recommendations that seek to address some of the concerns the Committee heard from the industry. The Committee's inquiry examined local newspapers, radio, television news and internet based media. The Report looks at what constitutes 'local' and 'regional', and what level of 'localness' is necessary and appropriate for different forms of media. It also discusses the importance of plurality in local media - that is, the number of different media 'voices' in an area or on a media platform (the particular media format). The Report comments on the changing local media landscape and the impact of the internet on more traditional forms of media. While the Committee highlights areas where the Government, or other public bodies, can implement changes that could help the local media industry, the Report concludes that many of the solutions lie with the media groups themselves.

Committee Chairman John Whittingdale said:

"Local media performs vital functions in society. It scrutinizes and holds to account local authorities and institutions, it informs people of news and events in their communities, and it forms part of the local identity of an area. It also provides a training ground for staff and a source of news for national media. Yet local media face unprecedented challenges as a result of structural changes and the impact of a global recession. This has led to the closure of a large number of newspapers, many commercial radio stations becoming loss-making and the possible end of regional news on commercial television. This has serious implications for local democracy."

Regional and local newspapers

The Committee notes the impact that structural and cyclical factors have had on local newspapers. The economic downturn is beginning to show signs of recovery, but the impact of the growth and popularity of the internet on local newspaper purchasing and advertising revenues does not look set to reverse. The Committee concludes that in order to maintain the independence of local media it is not appropriate for the state to subsidise it. It is therefore vital for local newspaper publishers to innovate to survive, for instance by continuing to develop websites and utilise internet technologies.

The Report acknowledges the concern of local newspaper publishers about the current merger regime. During the inquiry publishers told the Committee that the current system prevents consolidation, which they argue is necessary for their survival. The Report concludes that the current regime does need to be re-examined by the Government.

The Committee notes with concern the growing number of local authority publications that are competing with commercial local newspapers, and also finds that some are misleading in nature and fail to make clear that they are council publications. The Report also comments on evidence of political bias in some local authority news sheets. The Report recommends that the Department for Communities and Local Government should amend its guidance for local authorities producing publications making it mandatory that such publications should clearly state that they are published by a local authority on their front page. It also recommends that the Office of Fair Trading should conduct a review into the impact of local authority publications on local commercial newspapers.

Finally, in this chapter of the Report, the Committee welcomes the Press Association's proposals for public service reporting, and suggests it could alleviate some of the pressure in local newspapers, and could be a solution to the gap that has emerged as local newspapers are increasingly too under-resourced to report on public institutions and local democracy.

John Whittingdale said:

"There is a real problem with local authority newspapers and magazines that needs to be addressed. We have seen council newspapers that are effectively posing as, and competing with, local commercial newspapers. While it is important that local authorities communicate with their citizens, it is unacceptable that councils can set up publications in direct competition to local newspapers and that act as a vehicle for political propaganda."

Regional news on television

The Report examines the popularity of regional news on television and the economic difficulties it is facing. In particular, it examines regional news on Channel 3 and Government proposals for independently funded news consortia (IFNCs), along with proposals made by the BBC to make some of their resources available to either ITV or the replacement IFNCs. It also considers the dispute between ITV and the Scottish television company, STV, regarding the Channel 3 schedule.

The Committee expresses concern that ITV may not be able to continue to provide regional news on Channel 3, and believes that the situation is in danger of reaching a crisis point that could jeopardise the plurality of regional television news. If it is not financially viable for existing Channel 3 licensees to continue to provide regional television news, then the Committee recommends that the public service broadcasting obligations and other regulatory burdens on ITV should be reduced, if not removed, in order to alleviate the financial pressure on the licensees and allow regional news to continue. The Report notes that Archie Norman, the new Chairman of ITV, may reconsider the decision to end ITV's regional news production which would be welcomed by the Committee.

The Report concludes that plurality of regional news provision is vital in a democracy. Therefore the Committee re-states its support for the principle of public funding, and notes the Government's proposal that this could be met from that part of the income of the licence fee that is currently allocated to the digital switchover help scheme.

John Whittingdale said:

"The position of regional news on Channel 3 is deeply worrying. The plurality of regional news on television is of upmost importance and needs to be protected. It is not acceptable for public to become reliant solely on the BBC for regional television news. The proposals for independently funded news consortia offer one solution, but their future is far from certain. In the meantime, to sustain regional news on ITV, the financial burdens created by ITV's public service obligations and other regulations should be lifted."

Local Radio

The Report discusses the importance of local radio and the impact it has on the identity of local communities. The Committee comments on the large increase in the number of local and community radio stations in the past 20 years and discusses what level of localness is sustainable for local radio.

The Committee supports Ofcom's proposals for deregulation of cross-media ownership, and agrees with local radio groups that the localness of radio should be determined by its output rather than location. It also welcomes Ofcom's encouragement of community radio as the Committee believes this will become an increasingly important part of the local media landscape.

John Whittingdale said:

"It is undeniable that local commercial radio is a very important source of local news for a lot of people. As with local newspapers, local radio news, on both the BBC and commercial stations, is a training ground for new journalistic talent and provides news content that often becomes part of the national news agenda. The current economic pressures affecting local radio are making the provision of local news challenging for local radio stations and urgent deregulation of the ownership rules must be implemented."

Local media online

The Committee notes the concerns of local newspaper publishers about news aggregation websites, such as Google News, which provide the consumer with a list of news headlines and links from numerous news sources. The Committee does not think it is acceptable that the local newspaper industry is prevented from taking any collective action on this by competition laws, and therefore recommend that the Office of Fair Trading should re-examine this issue.

The Report concludes that Google has achieved a dominant position through successful innovation and that some of the criticisms of Google from local newspaper publishers lack focus. It also notes that local newspaper groups can opt out of both Google web search and Google News if they wish. However, the Committee welcomes recent changes to Google News, designed to support local newspaper websites, and urges Google to be continually aware of the impact which their products can have on local newspapers and remain sensitive to the need for plurality in news provision.

Finally, the Committee considers whether it is local journalism, rather than local newspapers, that needs saving, and concludes that local printed newspapers are still relevant, not least because of the number of people who do not have access to the internet. However, the Committee believes that newspapers must innovate and adapt to the digital world if they are to survive.