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The submission is a response to the Government's proposal to provide top-up funding for news consortia through a contained, contestable element to be introduced to the next licence fee settlement in 2013 and on alternative sources of funding. It sets out some of the dangers of a contestable funding approach, and suggests two alternative approaches that could deliver news provision in the Nations and regions beyond the Â鶹Éç.

Sir Michael Lyons, Chairman of the Â鶹Éç Trust, said:

"The Trust strongly believes it is important for there to be other providers of local and regional news in the UK alongside the Â鶹Éç. We also recognise the structural challenges that the commercial sector faces. But top slicing the licence fee is the wrong answer – it would undermine the Â鶹Éç's independence and its direct accountability to licence fee payers, it would risk turning the licence fee into general taxation and we do not believe any ring-fenced amount could be contained. There are other solutions for supporting regional and local news and it is not too late to consider them.

"We believe that contestable funding could harm the PSB ecosystem. But if it proves necessary, other options include harnessing the value of the broadcast spectrum that will be freed up in 2014 for the benefit of commercial operators, which our estimates suggest will net around £130m a year. And for options which don't involve direct financial support, the Â鶹Éç has set out proposals to share know how and facilities with other media outlets, and Ofcom is currently consulting on the possibility of changing media ownership laws to help support commercial news providers.

"On the question of what should happen to any licence fee money that is not needed for digital switchover, the Trust intends to hand this back to the Government and believes they should pass it back to the public, whose money it is, in the form of a reduction in the future licence fee. This is in line with what the public have told us in independent research, where this was by far the most favoured option."

The submission consists of a Trust response to the independently funded news consortia (IFNCs) proposal, full detailed independent research from Ipsos MORI into UK adults' attitudes to the Government's proposals and the use of licence fee money, both before and after digital switchover is completed, a report from consultants Perspective on the implications of the contestability proposal for both the Â鶹Éç and wider industry, a report from consultants Human Capital on alternative funding models and responses from each of the Â鶹Éç's Audience Councils in England, Wales, Scotland and Northern Ireland.

The main points from the submission are:

• The Â鶹Éç supports the ambitions behind the Digital Britain report
• Top slicing the licence fee for funding news in the Nations and regions could damage the Â鶹Éç's independence and accountability – the foundations of a strong Â鶹Éç. And any potential top slice of the fee would not be contained to the initial amount, risking reduced Â鶹Éç services and an increased licence fee
• Independent qualitative research shows support for Â鶹Éç concerns about sharing the licence fee with commercial operators either before or after switchover
• The Trust intends to hand back to the Government any surplus from the Digital Switchover Help Scheme, and it recommends that any use should be consistent with both the public purposes for which the money was collected and with licence fee payers' views
• If Government believes large-scale policy interventions to provide public funding to sustain local news are appropriate, Administered Incentive Pricing (AIP) - harnessing the value of the broadcast spectrum that will be freed up in 2014, which is estimated to bring around £130m to the Treasury for the benefit of commercial operators - could entirely fund the IFNC initiative
• There is a lack of detail on the report's suggested alternative funding models - IFNCs - for the provision of news in the Nations and regions
• Introducing genre-specific contestable funding differs from the approach taken in the 2003 Communications Act and could have unintended consequences for the PSB ecology
• There are other existing options which could support local and regional news provision, including Â鶹Éç partnership proposals, Ofcom's proposals for radio content deregulation and the relaxation of media ownership rules, along with analogue spectrum released by digital switchover and online TV opportunities.

Ends

Notes to Editors

The Digital Britain report was published by the Department for Culture Media and Sport on 16 June 2009. Amongst a wide-ranging set of policy initiatives for the media and communications industries, it set out a consultation on funding options for national, regional and local news. More information can be found at:

The Ipsos MORI research

Quantitative

The Â鶹Éç Trust commissioned Ipsos MORI to carry out a survey among 4,140 UK adults aged 15 years and over. A nationally representative quota sample of 4,014 British adults was interviewed on Ipsos MORI Cabibus surveys. There was also a booster sample of 126 interviews carried out with a representative quota sample of adults in Northern Ireland.

Two versions of the questionnaire were designed: half of the sample (2,072) was asked about the anticipated under-spend and half (2,068) were asked about the contestable element.

Interviews were carried out using CAPI (Computer Assisted Personal Interviewing) between 14th August and 1st September 2009. Interviews were carried out face-to-face in respondents' homes and the final survey data have been weighted to reflect the UK population.

Qualitative

Ipsos MORI conducted seven deliberative workshops, each attended by between 12 and 18 participants, in London, Kent, Exeter, York, Cardiff, Glasgow and Belfast. The London group, which took place on 20th August 2009, was treated as a pilot and some amendments were made to the discussion guide and stimulus materials after this event. All of the remaining workshops took place in the evenings of the week commencing 24 August 2009. Given the complicated nature of the proposals, and to avoid confusing participants, it was decided that the workshops would focus solely on the contestable element of the licence fee, rather than any potential underspend, and how this should be used.

Unlike quantitative surveys, qualitative research is not designed to provide statistically reliable data on what the population as a whole are thinking. Such research is illustrative rather than statistically reliable and, therefore, does not permit conclusions to be drawn about the extent to which something is happening. Instead, qualitative research seeks to understand why people think the way they do and what drives their opinions.

The Trust has today published the following documents which have informed its submission to the Digital Britain consultation:

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