By David Rose
Channel 4's output of news could be cut back in a few years time if the broadcaster is not allowed a share of the BBC's licence fee.
Chairman Luke Johnson sounded the alert in Parliament after Lord Burns – media secretary Tessa Jowell's outgoing adviser on the BBC – said there was a case for ITV as well as Channel 4 to be allowed a share of a "larger pot" from the licence fee.
"They are going to find it more and more difficult to produce public service programmes," Lord Burns told a crossparty committee of peers reviewing the BBC's Charter.
Johnson admitted to peers: "If in five years time our audience share has shrunk, and production costs have risen materially, we will be up against it."
He said news, current affairs and original drama all lost money.
Channel 4's news output costs the company £20m a year, Johnson said.
"If we didn't have a news programme in that slot we would put out programmes which would cost substantially less."
While the Government has guaranteed the BBC will continue to receive the licence fee for the next 10 years, pressure for a re-examination then is expected to increase with the switch to digital TV scheduled for 2012.
Johnson said the BBC was looking forward to 10 years of certainty. "We live in a world where the second half of this year will see a tougher advertising market."
He said the £100m-£200m value of the indirect subsidy Channel 4 received from having free access to the spectrum was also shrinking.