Public money needed to save local journalism says Cairncross

Almost a year ago the government announced the setting up of a commission chaired by Dame Frances Cairncross to examine the future of local journalism. It reported earlier this month. Its purpose was to look into the sustainability of high-quality journalism, and threats to journalism, brought about by technological change and consumer behaviour. (See my blog ‘The Cairncross Review – can it reverse the decline of local and regional press?’ 8 July 2018 at : http://thespark.me.uk/?p=1019 )

After being set up and her panel of advisers selected, Cairncross allowed just ten weeks (which included the August holiday period) for public consultation. Despite the relatively short time allowed, the Commission received 757 responses and among those industrial bodies giving evidence were the Campaign for Press and Broadcasting Freedom (now closed down), the Ethical Journalists’ Network, Hacked Off, the press regulator IMPRESS, the Media Reform Coalition (MRC) , Media Wise Trust and the National Union of Journalists (NUJ). Evidence was also received from publishers, advertising organisations, platforms/tech companies, journalists (12), academics (24), non media bodies/charities, public service broadcasters and two ‘others’. The panel also met with organisations and individuals.

The report, published on 12 February, echoed many concerns already raised about the future of the newspaper industry, by reiterating the belief that the closure of local newspapers threatened democracy and noting that many local newspapers were owned by debt-ridden publishers which had cut investment and sacked hundreds of journalists to maintain profits. This had brought about a crisis in the coverage of local democracy. The report continued “The cost of investigative journalism is great and rarely seems to pay for itself …given the evidence of market failure in the supply of public-interest news, public intervention may be the only remedy.”

An important contributory factor resulting in the broken economic model was the shift of classified advertising revenue away from local publications to on-line advertising. The report noted that advertising revenue placed by small businesses with the three largest regional publishing companies fell from £2.8bn to £832m in the decade to 2016.

Her report made nine recommendations, these included:

Direct funding for local public-interest news: The Local Democracy Reporting Service should be expanded, and responsibility for its management passed to, or shared with, the proposed new Institute for Public Interest News (see below).

Establishing an Institute for Public Interest News: A dedicated body could amplify efforts to ensure the future sustainability of public-interest news, working in partnership with news publishers and the online platforms as well as bodies such as Vesta, Ofcom, the BBC and academic institutions.

Investigating the workings of the online advertising market to ensure fair competition: The Competition and Markets Authority should use its information-gathering powers to conduct a market study of the online advertising industry. This would examine the likely dominance of Facebook and Google in this market.

New codes of conduct to rebalance the relationship between online platforms and publishers with oversight from a regulator.

News Quality Obligation: The efforts of online platforms to improve their users’ ‘news experience’ should be under regulatory supervision. Platforms have already developed initiatives to help users identify reliability, and the trustworthiness of sources. They must continue, and expand these efforts but do so with appropriate oversight

Innovation funding: the government should launch a new fund focused on innovations aimed at improving the supply of public-interest news, to be run by an independent body.

Tax Relief: The government should introduce new tax reliefs aimed at encouraging (i) payments for online news content and (ii) the provision of local and investigative journalism. The report also suggested that organisations delivering public interest journalism should qualify for tax relief under the Charities Act (which would require amendments to the Act).

Other recommendations included an Ofcom review of the BBC’s market impact (of which more later from the NUJ and the MRC, both of whom are critical of this proposal) and a call for the government to develop a media literacy strategy.

Reaction to the report from media reformers was generally supportive, but critical of some recommendations. Writing in the Inforrm Blog, Steven Barnett, Professor of Communications at Westminster University said that the report “…has produced some innovative and potentially exciting ideas which – if properly and independently implemented – could genuinely deliver more diverse, high-quality public interest journalism, particularly at the local level where it is desperately needed. But it will require political will to resist a powerful print lobby motivated by corporate self interest…”

Steve also referred to the report’s recommendation for the expansion of the BBC-funded Local Democracy Service which currently pays for 144 reporter contracts with local publishers. “Because the scheme was dreamt up in conjunction with the News Media Association (NMA) the big three regional groups – Newsquest, JPIMedia (formerly Johnston Press) and Reach plc (formerly Trinity Mirror) – have hoovered up the vast majority of those contracts leaving just a handful for the smaller independent and hyperlocal sectors.” He referred to its cost of £8m to the licence fee payers which was effectively subsidising three very large regional publishing groups without any oversight or accountability, while these companies have been sacking their own journalists.

Natham Sparks, Policy Director of Hacked Off, said that: “Cairncross has made some welcome and positive proposals, but she has ducked the two greatest threats to the future of the press in the UK: collapse in public trust, and the power of the publishers. Without addressing these two existential threats to the UK press industry, the recommendations published today will have little effect.”

Brian Cathcart, Professor of Journalism at Kingston University, Surrey said.”It makes decent proposals for helping public service journalism but they are worryingly vulnerable to manipulation by corporate press bosses and their ministerial friends….”

The Media Reform Coalition’s (MRC) Angela Phillips welcomed the report’s conclusion that support for public-interest news providers was particularly urgent and justified and that government should look to plug the local gap to ensure the continued supply of local democracy reporting and: “Given the evidence of a market failure in the supply of public-interest news, public intervention may be the only remedy.” However the MRC says that: “Some of her solutions are rather vague: recommendations for codes of conduct between internet platforms and news providers and a News Quality Obligation on the platforms to be monitored by a new regulator. Given that she steadfastly declines to provide any definition of news quality, it is quite hard to see what this actually means.”

Michelle Stanistreet NUJ General Secretary said: “ Dame Frances Cairncross’s report is an important piece of work which charts the demise of local journalism, the cuts to newsrooms and the loss of titles largely because of the move to digital, with people reading their news on the tech giants’ platforms, and the draining of advertising revenue to Facebook and Google. The tax concessions and other measures she recommends are to be welcomed, but I hope this has not been a missed opportunity.”

Turning to the report’s comments on the BBC she said: “Seeing the BBC served up once again as a bogeyman and convenient cash cow is also an affront to the vital role of public service broadcasting in our democracy and its massive contribution to the broader creative industries.

“The BBC already funds the local democracy reporter scheme and its technical innovations such as the iPlayer led the way and has been used by other broadcasters. It’s a nonsense to suggest that BBC online has destroyed local newspapers – as the report says, the newspaper groups went on costly acquisition sprees before the market collapsed in the late 2000s and then cut investment and sacked hundreds of journalists to maintain profit margins.

“BBC Online is a trusted and much-used source of news, it is not the problem here and its future must not be imperilled. The NUJ supports the development of a media literacy strategy and the union can play an important role in that. We will now look at the details of the report and respond in due course.”

Welcoming the report, Culture Secretary Jeremy Wright told the Commons on 12 February how the government intended to respond both to those recommendations which they were prepared to progress immediately and others where further consultations were needed. He assured the Commons that the government’s response on the entire report would be made later this year.

In the end it comes down to having the political will to make radical changes necessary to recreate journalism as a public service and to bring about a better media, not based on failed market models, but ones that are independently funded so that we can hold power to account and empower citizens to participate more fully in society. Roy Greenslade pointed out in his article in The Guardian on 1 July 2018 ‘Last chance to fill in the blanks on funding journalism future’: “The (Cairncross advisory) panel includes publishers who have been responsible for journalism’s deterioration, and who have a vested interested in making profits rather than aiding democracy.”

We must make sure that as a result of this report public money is not used to line their pockets, which would do nothing for good quality  journalism and democracy.

Details of the Commons statement and debate can be found at: https://www.theyworkforyou.com/debates/?id=2019-02-12b.771.2

You can read the Cairncross report at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/779509/021119_THE_CAIRNCROSS_REVIEW_A_sustainable_future_for_journalism.pdf

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