Direct funding for local radio should sound alarm

What would you say if the Government suddenly announced it was going to fund UK radio stations out of direct taxation? David Elstein and his Broadcasting Policy Group, commissioned by the Conservative Party to consider the BBC’s future funding, would welcome it.

The Elstein Report – which recommends phasing out the licence fee – finds no problem with the Government paying directly for public service broadcasting. Indeed, it thinks this is one of the ways the BBC should be paid for when its Royal Charter expires at the end of 2006 – along with voluntary subscriptions for its television channels. It says the Chancellor of the Exchequer should weigh broadcasters’ claims on the public purse against those of schools, hospitals and defence.

The Elstein Report was given fairly short shrift by media commentators. The conventional view – among broadcasters, politicians and academics – has been that there are dangers in broadcasting being funded directly by government. It’s one reason why the BBC is run under a Royal Charter, rather than Act of Parliament, and why its UK services are funded indirectly – by the licence fee.

There are fears that the Chancellor would not be generous when faced with a choice between broadcasting and hospitals and that direct funding would make it easier for ministers to tame the BBC. “Direct funding would make the corporation even more subject to the whims of government – and that’s really scary given what has happened with Hutton,” said a contributor to this week’s Panorama debate on the future of the BBC.

So you may be surprised to learn that last week the Government did announce it was going to fund UK radio stations directly from taxation. “Half a million pounds for community radio,” proclaimed the press release from the Department of Culture Media and Sport (DCMS), which began: “Budding radio broadcasters across Britain will find it easier to set up a station in their local village, town or city, thanks to a half-a-million-pound grant, the media secretary Tessa Jowell announced today. The cash will help fund community radio stations – a new tier of not-for-profit radio, run by local people, for local people about local issues.”

Because it was about community radio – and was very small-scale in the scheme of things – the announcement attracted virtually no attention. No one even pointed out that its “local stations for local people” mantra seemed to come straight out of The League of Gentlemen.

Of course it’s not the only example of programme services funded by taxation. The BBC World Service receives a direct grant from the Foreign Office and has, as Elstein points out, an admirable reputation for independence and authority. The Government also gives a grant to Welsh-language programming, via S4C.

But at a time of public debate over the future funding and structure of the BBC – and, to a lesser extent, of Channel 4 – this latest development in the government funding of broadcasting is surely of more than passing interest.

The &£500,000 fund will be administered by Ofcom; not the DCMS. People with community radio licences will be eligible to apply for financial support from the fund. That makes it a model for the Public Broadcasting Authority, which the Elstein Report puts forward as the way that BBC radio – and public service programming – should be paid for beyond the end of 2006. This proposal, like many in the report, has been widely criticised.

Yet, direct funding for community radio has been welcomed by commercial stations. They don’t want the small-scale stations competing with them for advertising. “Commercial radio does not believe community radio should be funded commercially at all,” says Commercial Radio Companies Association chief executive Paul Brown. “If the Government wants to put money in, that’s up to them.”

The BBC is also fairly relaxed about it, even though community radio seems remarkably similar to BBC local radio. When the Communications Bill was published, it welcomed the provisions for community radio, saying they seemed to complement the BBC’s local stations.

Even so, the Government’s Community Radio Fund is another step in the “normalisation” of government grants to broadcasters, a further precedent for changing the relationship between ministers and programme-makers.

Does that matter? In terms of independence from government, the DCMS points out that all community radio stations are bound by Ofcom’s News and Current Affairs Code, which includes rules on impartiality and accuracy of news. Some say better Ofcom than the DCMS itself, given that the department now approves details of the programme schedules of the BBC’s digital services.

But it gives the regulator Ofcom yet more power, as the body that must guarantee public service broadcasting is free from interference by government.

Torin Douglas is media correspondent for BBC News