Cairncross Review: Please, Dame, can we have some more?

The government-led review into the future of UK news has its heart in the right place, writes Raymond Snoddy – but there is much missing to really remedy publisher misfortunes

Sometimes maybe it’s best to be satisfied with a single bowl of gruel rather than having the request for more dismissed out of hand.

Dame Frances Cairncross has dispensed a single bowl of gruel for the news industry, although maybe she thought that was the best she could manage.

As someone who understood better than most, almost from the outset, the disruptive power of the digital revolution and its effect on almost every aspect of society, maybe she believes there’s not a lot that can be done.

In her Review into the sustainability of high quality news – defined mainly as public-interest news – Dame Frances sets out with intelligence, integrity and professionalism the difficult state we are in.

It is a story well known to everyone in the news business, particularly those fighting their battles on some of the most challenging terrain of all – local journalism.

The distinguished economist and journalist highlights some of the most intractable dilemmas of all. They include what to do about the fact that some of the most socially useful local journalism – holding local councils to account – is expensive to produce and interests the general public very little.

And if subsidies are your game how can you challenge authority in general and governments in particular while at the same time going to them looking for hand-outs?

While acknowledging the merits of sophisticated analysis in the face of an obvious crisis, it’s solutions, however imperfect, that people are looking for.

The biggest threat facing the media, and some would say democracy itself, is the near total dominance of a handful of tech giants, particularly Facebook, Google and their many accumulated acquisitions.

Dame Frances decided that issues of dominance were beyond her remit. They probably were, but she could have lent her weight and prestige to a recommendation that such an investigation might be necessary given that many people think it lies at the heart of the problem.

From that dominance flows a vast imbalance of wealth between what, until recently, were trillion dollar companies and the struggling legacy media.
[advert position=”left”]

Many publishers wanted to see a levy on the tech companies, either on their digital advertising or their revenues, to help fund public-interest journalism, described recently by Henry Faure Walker, chief executive of Newsquest, as “an increasingly unprofitable activity.”

Dame Frances recommended no such levy.

In a slightly different context, but only slightly, many in the communications business would like to see the social media companies officially designated as publishers, albeit hybrid ones, so that they can be held responsible for what they transmit.

Didn’t spot that in the Review and it certainly wasn’t one of the nine recommendations.

So what was in the helping of gruel?

There was at least one useful, if modest, suggestion – that the VAT exemption of newspaper publishers should be extended to their online editions, and indeed to digital publishers. Absolutely, and a judge has already ruled there is no difference between the two, but will the Government be prepared to make the necessary legislative changes and give up around £200 million in tax a year?

Culture secretary Jeremy Wright has, according to reports, since promised to discuss tax relief for online news publishers.

Another is the creation of an Institute for Public Interest News, which could evolve into a body resembling the Arts Council “in scale, reach and perhaps budget.”

Dame Frances suggests government funding in the form of an endowment might be preferable to grant-in-aid in terms of perceived independence for such an Institute.

She would like the financially-strapped BBC – think free licence fees for the over-75’s – to consider increasing its funding of the Local Democracy Reporting Service, which now costs £8 million a year, and then hand over management of the scheme to the new Institute.

Dame Frances also wants communications regulator Ofcom to see whether the BBC is getting the balance right with its online offering or whether it strays too far into the commercial domain with soft magazine features.

The newspaper industry has obviously been bending Dame Frances’s ear on this one although she doesn’t fall for it entirely, pointing out that the BBC is not the only organisation putting out free online information – those doing so include the Guardian and The Independent.

An Innovation Fund is also proposed, funded at the rate of £10 million a year. What’s not to like about that – if the Government, or somebody else, will pay.

There are three recommendations that affect the social media but none of them are likely to keep Mark Zuckerberg awake at night.

There should be new codes of conduct to “rebalance” the commercial relationship between online platforms and publishers. There should be oversight from a regulator but Dame Frances says she is neutral about which regulator that should be.

If things aren’t working there should be unspecified sanctions by the unnamed regulator. There should also be regulatory supervision over efforts to improve the news experience of users of online platforms. Efforts to improve the reliability and trustworthiness of sources should continue.

The social media platforms should have a new quality obligation.

Dame Frances wants to see an investigation into the workings of the online advertising market to ensure fair competition.

The vehicle should be the Competition and Markets Authority, which should use its information gathering powers to conduct a market study of the online advertising industry.

As the CMA said in October it was considering just such a step, this is relatively uncontroversial. The Review may give the idea a nudge in the right direction however – Jeremy Wright has now also written to the government department in support of an investigation.

All steps in the right direction but what does it all add up to? Recommendations for two regulatory reviews, some unsurprising stuff about media literacy and a code of conduct for platforms supervised by an unnamed regulator. If the Government or others will pay, there will be a £40 million Innovation Fund, a new Institute for Public Interest News and a digital VAT concession.

The test is, if everything that Dame Frances Cairncross has asked for from Government was granted – an unlikely outcome – how much difference would it make?

It would be welcome but little that is fundamental would have changed.

Only a single bowl of gruel has been sought, and it might have been better to risk disappointment and ask for more.

But at least the Review’s heart is in the right place. To incentivise the provision and consumption of public-interest news, Dame Frances says, will require new sources of funding removed from direct government control.

“It will need institutional and financial structures that combine a guarantee of independence with adequate support. That will be a difficult combination to secure, but the future of a healthy democracy depends on it,” Dame Frances concludes.

Indeed it does.