Government withdraws licence fee cash for Channel 4

The government has withdrawn plans divert £14m of the BBC licence fee to Channel 4 to help with the cost of the digital switchover and is broadening its funding plans for the broadcaster, reports Media Guardian.

Culture secretary Andy Burnham said today in a written statement to parliament that the debate on the future of public service broadcasting has moved on since the offer of funding, and said that Channel 4’s future funding would be “more wide-ranging”.

“In the period since the notification was made, the debate on the future of public service broadcasting in the UK has moved on significantly.” Burnham said.

“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.”

Burnham said that the eventual settlement for Channel 4 would be more wide-ranging than a proposition relating specifically the switchover costs.

“The government will, of course, ensure that any new proposals for potential state aid arising from this wider consideration process are properly notified to the commission in advance of implementation.

“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.”

A Channel 4 spokesman 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.”

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