Government withdraws Channel 4 funding plans
The government has withdrawn its plans to award £14 million to Channel 4 to help the broadcaster with the cost of the digital switchover.
In a statement today, culture secretary Andy Burnham, said the plan had been overtaken by events because forthcoming proposals on Channel 4’s future funding would be “more wide-ranging”, according to reports.
The government had planned to divert around £14 million of the BBC licence fee to Channel 4 – though the European Commission has been investigating the proposals as a potential breach of state rules.
In September, Channel 4 said it needed extra money to help fill a funding gap of £150 million by the time of the digital switchover in 2012 (see Ofcom Warns That Channel 4 Faces £100m Funding Gap).
Ofcom’s second phase review supported Channel 4’s argument but estimated that the broadcaster only needed additional funding of around £60 – £100 million (see Ofcom Publishes Second Phase of PSB Review).
However, in today’s statement Burnham said: “In the period since the notification was made, the debate on the future of public service broadcasting in the UK has moved on significantly.
“Furthermore, the structural challenges that traditional commercially-funded public service broadcasters face have been exacerbated by current cyclical conditions.
“The government has therefore brought forward its timeline for decisions and is now committed to take a more comprehensive view on the future institutional and financial framework of public service broadcasting, including the future of Channel 4, early in 2009.
“Against this background the government has decided against proceeding with the notified proposals to provide assistance for Channel 4 in respect of its switchover costs,” he concluded.
A Channel 4 spokesperson said: “Channel 4 supports the decision to withdraw this proposal. As the Government makes clear in its statement, broader decisions about the future framework of public service broadcasting will be made early in 2009 as part of its Digital Britain review.
“In light of the Government’s accelerated timetable, it makes sense to seek any necessary approvals from the commission for a single, all-encompassing solution to support the UK’s public service broadcasting system, rather than a series of small-scale proposals,” they added.
Channel Four: 020 7396 4444 www.channel4.com