Government to sell Channel 4 following consultation

Published by Scott Challinor on April 5th 2022, 9:09am

The government will press on with plans to privatise Channel 4, with culture minister Nadine Dorries saying that public ownership is “holding it back from competing against streaming giants”.

Ministers have decided to go ahead with privatising the channel, which is state-owned but does not receive public funding, following a consultation process.

90 per cent of the channel’s revenue comes from advertising, but the government wants to enable the broadcaster to have greater freedom to borrow money or raise private sector capital to compete with the likes of Amazon and Netflix.

While Channel 4 has expressed disappointment with the decision, a spokesperson said that it would “continue to engage” with ministers to “ensure that Channel 4 continues to play its unique part in Britain's creative ecology and national life”.

The spokesperson said: “With over 60,000 submissions to the government's public consultation, it is disappointing that today's announcement has been made without formally recognising the significant public interest concerns which have been raised.

“The proposal to privatise Channel 4 will require a lengthy legislative process and political debate.

“We will of course continue to engage with DCMS [the Department for Digital, Culture, Media and Sport], government and Parliament, and do everything we can to ensure that Channel 4 continues to play its unique part in Britain's creative ecology and national life.”

Although Channel 4 was founded in 1982 by Margaret Thatcher’s Conservative government to deliver programmes for under-served audiences, the current Conservative ministry has been arguing in favour of privatisation over recent months.

Confirming that government now plans to push a sale through, Dorries [pictured] said that a change of ownership would “give Channel 4 the tools and freedom to flourish and thrive as a public service broadcaster long into the future.”

The revenue generated from selling Channel 4 will be reinvested into the TV industry through a “creative dividend”, with some set aside for independent production companies.

Dorries explained: “I will seek to reinvest the proceeds of the sale into levelling up the creative sector, putting money into independent production and creative skills in priority parts of the country - delivering a creative dividend for all.”

A government white paper will be forthcoming to set out full plans for the future of the channel.

Labour has criticised the government’s decision to sell Channel 4, with shadow culture secretary Lucy Powell branding the move an act of “cultural vandalism”.

Powell said: “Selling off Channel 4, which doesn't cost the taxpayer a penny anyway, to what is likely to be a foreign company, is cultural vandalism. It will cost jobs and opportunities in the North and Yorkshire and hit the wider British creative economy.”

There have also been reservations from within the Conservative party itself, with former health secretary Jeremy Hunt suggesting that it would see valuable public service broadcasting competition to the BBC lost.

Hunt explained: “I’m not in favour of it because I think that as it stands, Channel 4 provides competition to the BBC on what's called public service broadcasting, the kinds of programmes that are not commercially viable - and I think it'd be a shame to lose that.”

Helen Grant, the current trade envoy, also expressed her own disappointment with the decision.

Grant said: “Disappointed and unconvinced by the Department of Culture, Media and Sport's decision to privatise Channel 4 notwithstanding sustainable alternatives.

“Decision leaves many unanswered questions. The government must show how it will safeguard the remit in legislation and protect the independent production sector.”

The government has insisted that Channel 4 will remain a public service broadcaster following the sale and will continue to deliver prime time news and deliver “an important social, economic and cultural contribution to the UK”.

Image taken from Wikimedia Commons

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Scott Challinor
Business Editor
April 5th 2022, 9:09am

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