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Why is the BBC giving licence fee cash to the companies who have slashed local journalism?

Under its new charter, the BBC will be subsidising Britain's biggest newspaper publishers.

Image, Bobbie Johnson

With only a month to go until its current Charter expires, some big questions about the BBC’s future remain unanswered. Will anyone foolhardy enough to chair the new unitary Board be found? Does Ofcom know how it is going to begin regulating the BBC? And why is the BBC getting into bed with some of the biggest newspaper publishers in the UK? 

What – you hadn’t heard about that one? It is true. The BBC has struck a deal to divert at least £8m of licence fee payer’s money into the pockets of newspaper publishers in every year of this Charter period – £88m in total.

Why has the BBC done this? How will these funds be allocated? How can the BBC possibly balance the demands of public service broadcasting with the fiercely (and rightly) partisan nature of newspaper publishing? Once again, there are no clear answers to these questions. But there are reasons to be very concerned.

The so-called Local Democracy Reporter scheme emerged out of the lobbying which surrounded the febrile process of BBC Charter renewal earlier this year. At that time, many newspapers were calling on the government to curb the BBC’s autonomy. One of their main arguments was that the BBC’s local journalism hollows out the space for their own activities.

This ignores the fact that a similar erosion of the local newspaper market has taken place across the English-speaking world, not least in the United States, where there is no BBC to blame. However, the BBC took the lobbying seriously enough to sit down and negotiate with newspaper publishers under the auspices of their trade body, the News Media Association (NMA).

On 11 May, a partnership agreement, jointly signed by Ashley Highfield, Chair of the NMA, and James Harding, Director of BBC News and Current Affairs, was published simultaneously on the NMA’s website and the BBC’s website. The letter identifies four initiatives on which the NMA and the BBC plan to work together, including a ‘local public sector reporting service’ (since redubbed the Local Democracy Reporter scheme), through which the BBC will award £8m of licence fee funds to local newspapers in order to employ 150 local journalists per year, to generate reports on local democracy.

The day after this agreement was signed, the government published its White Paper on the future of the BBC, in which it backed away from earlier threats to the BBC’s funding and autonomy.

Did the publishers call off the dogs in return for concessions that were reached in the partnership agreement between the NMA and the BBC? Is the Local Democracy Reporter scheme a pound of flesh which the BBC was prepared to sacrifice in order to retain the licence fee? We do not know. However, it is clear that the scheme effectively constitutes a form of top-slicing, whereby a sizeable chunk of the licence fee is siphoned off from the BBC and used to subsidise the operations of other news providers.

Now, a bit of subsidy for local news would not be the end of the world. The erosion of local news in the US has already led to calls for a ‘radical rethinking of the news ecosystem’ in the era of post-truth politics. A similar democratic deficit in the British media has created black spots in local news coverage which may have led to the national media’s failure to see Brexit coming. The latest research shows that two-thirds of local authority districts in the UK are not effectively served by a dedicated local daily newspaper. 

We all want to see local authorities and other powerful bodies held properly to account. Maybe public funds should be made available to a range of independent news publishers? In fact, shouldn’t the Local Democracy Reporter scheme be welcomed with open arms if it helps to meet these needs?

Perhaps – if only the scheme was truly likely to strengthen the local news ecosystem. But in its current form, the scheme is unlikely to deliver any benefits, either for the BBC or for local democracy. Because, rather than working with news organisations that are genuinely committed to addressing the democratic deficit, the BBC has got into bed with companies including Archant, Johnston, Newsquest, Tindle and Trinity Mirror, which together own 80% of local newspaper titles, control 85% of revenue in the sector and have arguably done as much as anyone to cause the problem which this scheme purports to address, by closing local and regional newspapers across the UK.

Whilst the big five publishers continue to cut and consolidate, a dynamic new sector is emerging. A growing number of independent news outlets have been established by professional journalists and grassroots activists who believe that their communities deserve better than this. They include a blend of hyperlocal operations, fact-checking watchdogs and investigative journalism units. The latest research shows that there are more than 400 hyperlocals in the UK, seven million of us visit them on a weekly basis, more than two-thirds have supported local campaigns in the last two years and almost half have run investigative reports.

If you were serious about supporting local democracy, surely you would want to work as closely as possible with this sector? Yet, notwithstanding a ‘hyperlocal forum’, in which the BBC met a few such publishers, it has not signed any kind of partnership agreement with them, but with the News Media Association, a body that exists solely to represent the interests of the dominant publishers.

Surely, these group should not be in the driving seat of any attempt to take money from the BBC and into the private news sector? But they are, as the partnership agreement makes absolutely clear:

‘The delivery of the proposals, and the broader relationship between the BBC and its local news partners, will be subject to a joint annual review by the BBC and the NMA’.

Even worse, the agreement states that the funds should be directed towards ‘qualifying providers of local news’ such as ‘IPSO-accredited organisations’. This formulation is meaningless. IPSO (the Independent Press Standards Organisation) does not ‘accredit’ publishers. It simply handles complaints against them. Membership of IPSO is no guarantee of any particular quality of journalism.

So why should IPSO’s members be singled out for preferential treatment? Could it be because IPSO is funded and overseen by the Regulatory Funding Company (RFC), a body which operates out of the same premises and with the same personnel as the NMA? Is it relevant that members of the NMA are almost all members of the RFC – and therefore IPSO?

This situation would be laughable if it were not so alarming.

Our membership at IMPRESS includes a number of independent news publishers who are not represented by the NMA and who did not feel that their voices had been heard by the BBC. In light of their concerns, we wrote to the BBC to propose that – if the BBC is determined to go ahead with this initiative – it should take urgent steps to ensure that the licence fee is top-sliced in the interests of the public, not a small number of newspaper owners. We recommended clear and transparent criteria by which publishing partners should be selected under the scheme, and appropriate oversight by an independent group – not a trade body with a clear conflict of interests.

We eventually received a reply, more than two months later, in which we were assured that development of the Local Democracy Reporter scheme is ‘not exclusive to the NMA, and is open to all interested parties’; that ‘management and operation of the proposals will be independent from the NMA’; and that ‘oversight, like any other BBC activity, will be subject to a single, independent regulator, Ofcom’.

This was news to us and might be news to the NMA and its members if they had taken seriously the terms of their partnership agreement with the BBC. The discrepancy between the partnership agreement and these statements only enhances the urgent need for clarity.

Why? Because the future of public service media is at stake here. £8m a year may be a very small amount in comparison the BBC’s annual budget of £5bn. But the true danger here is the dilution not of the BBC’s funding but of its autonomy.

It would be strange in any circumstances for the BBC to sacrifice editorial and commercial control to outside interests. It is positively bizarre for it to hand over the reins to a trade body that represents the interests of some of its staunchest foes. The Vice Chair of the NMA, in case you did not know, is David Dinsmore of News UK, part of the Murdoch empire which also includes the BBC’s largest rival in the UK, Sky.

The risks which this scheme poses to the BBC, and to local journalism, are clear. Immediate action is necessary to address the risks. But, at a minute to midnight, is the BBC brave enough to press pause?

About the author

Jonathan Heawood is CEO of IMPRESS, the independent monitor for the press. 


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