Channel Four privatisation: letter to UK Government

To: Oliver Dowden, Secretary of State for Digital, Culture, Media and Sport
From: Angus Robertson, Cabinet Secretary for Constitution, External Affairs and Culture

I am writing to express my deep concern about the UK government’s plans to privatise Channel 4. The Scottish Government wholeheartedly supports public service broadcasting and the important and distinctive role Channel 4 plays to deliver programmes in the public interest, grow and strengthen the independent production sector and drive creative innovation across the whole of the UK. I attach a copy of the Scottish Government’s response to your consultation, setting out our opposition to any plans to privatise a much-valued public asset. I seek your strongest assurance that you will respond to the matters raised and questions I put to you below.

Privatising Channel 4 will weaken its remit to deliver programmes in the public interest that would not otherwise be made and to reach and represent diverse audiences. As you know, Channel 4 occupies a unique position in the delivery of public service broadcasting, championing new formats and commissioning experimental programmes. Channel 4’s investment in original, distinct UK content and diverse talent captures the heart of what the UK represents; reflecting UK society back to itself and to the world.

Looking at the evidence in Scotland of how Channel 4 has fostered the independent production sector, delivered for audiences and sustained our cultural voice, I can see no purpose to the changes proposed in your consultation. They will only undermine progress at Channel 4 at the very time it is increasing its commissioning from, and contribution to, the nations. It is the public ownership of Channel 4 that allows it to take programming risks and focus entirely on its content and on making a far wider contribution to public benefit which will be lost to privatisation.

It is clear that the last year has been a challenging period for broadcasters and the wider creative sector. In the face of these unprecedented challenges, Channel 4 has demonstrated its resilience by managing uncertainty and continuing to deliver on its remit. While I share your view that increased global competition and changing audience habits pose increasing challenges to linear TV broadcasters such as Channel 4, I strongly disagree with the assertion that privatisation offers the best means of ensuring its future success and sustainability as a public service broadcaster and its continued contribution to the UK’s creative industries.

Given the flaws in your proposal and the real and serious consequences it would have for Scotland, its production sector and its audiences, I feel I have to write in the starkest terms.

I would contest the premise you start from, namely that Channel 4’s model is not working and is financially unsustainable. Even in these challenging times, Channel 4 has returned a surplus, is seeing impressive advertising growth and, with its digital strategy, laying a strong foundation for its future. The starting point for your proposals is simply not reflected in reality.  

I challenge the rationale of your argument that privatisation will improve what Channel 4 delivers when this unnecessary move looks set to dismantle the very benefits Channel 4’s unique business model brings to Scotland and its companies, diverting Channel 4 from its public service goals towards the service, ultimately, of private shareholders. For example, research by the industry organisation Pact forecasts the independent sector is at risk of losing £3.7 billion over the next 10 years if the proposal goes ahead. Independent analysis commissioned by Channel 4 shows that privatisation could result in a £2 billion reduction in Channel 4’s supply chain contribution to the creative economy, with £1 billion lost from the nations and regions. That will have a devastating impact on a sector that has managed to weather the pandemic better than many parts of the creative industries, and will cause unnecessary damage to our economic recovery.

Furthermore, I truly question your support for this proposal when it is in direct contradiction to your own commitments to levelling up across the UK and strengthening the union. Instead of ensuring valuable organisations such as Channel 4 contribute positively to the economy, businesses, culture and creative reputation of the four nations in the UK, this initiative will do the opposite.

Privatisation threatens Channel 4’s social, cultural and economic contributions to UK and Scottish society, including its broad range of high-quality programmes. Audiences consistently rate Channel 4 more highly than other PSBs in taking creative risks, tackling issues that other broadcasters would not, and enabling alternative voices to be heard. Its wide-ranging support extends through its talent and skills development, including 4 Skills which develops diverse talent in the nations and regions and which will be expanded to help 15,000 young people a year.

Private ownership will weaken Channel 4’s public interest aims to deliver culturally specific content that would not otherwise be made through its reinvestment of profits into commissioning, enabling it to take creative risks and invest in original content. This was worth £492 million in 2019. Channel 4’s development of experimental and innovative programming and investment in entrepreneurs with new ideas and formats creates jobs and the conditions for others to invest in the creative industries, which are now worth in excess of £3 billion. Over the years, Channel 4 has also invested significantly in the UK film industry bringing films to UK and world audiences, including the BAFTA nominated Scottish production Limbo.

We risk losing the strong momentum and partnerships Channel 4 has built with the Scottish creative sector. The opening of Channel 4’s creative hub in Glasgow with network commissioning responsibility in Scotland for the first time was a step in the right direction, marking an intention to bring even greater support for Scottish-based independent companies. The Channel 4 model has importantly allowed independents to retain profits and intellectual property in Scotland, providing them with the opportunity to become sustainable players in their own rights with the greatest potential to add long-term value.

I am particularly concerned that the consultation does not adequately set out how Channel 4’s 4 All the UK strategy to significantly boost jobs in the nations and regions and representation of all the UK would be protected. We expect the continuing presence of Channel 4 commissioners in Glasgow to help improve the representation of Scotland on Channel 4, develop the creative sector across Scotland and grow new Scottish talent.

You have previously spoken about culture as a catalyst for levelling up areas outside of London and putting it at the heart of pandemic recovery plans. Privatisation goes against this ethos, and risks reversing some of the hard-fought progress in the nations and regions. It will extinguish the opportunity for the creative hubs to make real change in the nations and regions, at a time when they are only just establishing themselves.

Privatisation not only threatens Channel 4’s role in developing our globally successful production sector, but also its cultural status as a UK media brand to showcase our creative outputs, export distinct UK content, and enhance our cultural diplomacy to shape the UK’s reach to the world and strengthen our cultural capital. It is astonishing that you would risk destabilising that asset when it should be celebrated and strengthened. At the very least, at a time when wider changes are underway to strengthen public service broadcasting I would urge you to wait for the results of these while looking at less risky ways Channel 4’s success and impact could be increased. 

Questions for the Secretary of State

In order to assess the proposal fully, I ask the following:

• will you provide the evidence on which you reached the conclusion that Channel 4 was financially unsustainable requiring privatisation to flourish?
• can you quantify the public benefit of moving from a model where Channel 4 is owned by the public but costs taxpayers nothing to one where it is sold to private operators?
• will you provide an impact assessment comparing how Channel 4 currently benefits independent production companies in the nations with how a privatised Channel 4 would benefit them?
• will you further provide this impact assessment for the nations on the basis of the Channel 4 model being changed from a publisher-broadcaster model to one allowing in-house production?
• can you provide an assessment of the value of intellectual property and exports for SMEs in Scotland and across the UK generated by Channel 4’s current model and how it would be affected by a change in model?
• can you provide assurance that Channel 4’s offices outside of London, including the creative hub in Glasgow, will be retained and fulfil the commitment to incrementally increase support for the creative sector in Scotland?
• can you set out how you will guarantee Channel 4’s wide ranging contribution to the Scottish creative economy, including its production commitments, will be protected under private ownership?
• can you also guarantee that Channel 4’s investment in training and skills and support for SMEs will be maintained at or above its current level?
• can you set out how Channel 4’s investment in content that advances diversity and equality, rooted in the creativity and experience of different communities, including the Paralympics, will be protected?

You may argue that we cannot be certain that privatisation will erode the ethos and direction of Channel 4 and that you will put in place safeguards to protect against this. I suggest it is overly optimistic both to hope a privately owned company will operate with the same public spirit and willingness to take creative risks, and to trust any deficiencies would be prevented by regulation which intervenes after the fact, possibly when it is too late.

More importantly, however, why take that chance?

The support I have heard from across our creative community for Channel 4 and the widespread opposition to this plan make clear how deeply people in Scotland feel about this proposal. While it is vital to look at the evidence, the arguments go beyond financial numbers and individual programmes – they focus on the risk of losing something far greater than the sum of its parts, an organisation unique to the UK which has demonstrated that it champions new talent, nurtures it patiently and takes on ideas and people others do not. Those attributes are enabled by Channel 4’s publicly owned status, and would be eroded by privatisation. I urge you in the strongest terms to reconsider what we risk losing and why you have settled on this course. 

I seek your assurances that the full impact to the output of Channel 4 services, businesses and the wider creative industries in Scotland will be considered and that you commit to fully assess and publish the economic impact of any changes before any final decision is made. I look forward to your urgent response to the questions I have set out above. I would be very happy to discuss my concerns with you directly.