The privatisation of Channel 4 has been ruled out by the culture secretary who said the sale of the broadcaster would be disruptive to the country’s television production industry.
Michelle Donelan said in a letter to the prime minister that there were “better ways to secure” the channel’s sustainability, adding that she wanted to give the publicly-owned channel greater “commercial flexibility” and allow it to produce more of its own content.
Donelan’s predecessor, Nadine Dorries, with the support of former prime minister Boris Johnson had made clear her desire for the channel — which has a public service broadcasting remit but is entirely dependent upon commercial income rather than public subsidy — to be privatised.
However, the move was unpopular however with opposition parties, the television industry, and Conservative MPs.
In a letter to Rishi Sunak, which was published by the News Agents podcast on Wednesday, Donelan said she recognised her decision would “be popular with a majority of parliamentarians, particularly those who raised concerns about the effect a sale of C4C may have on the UK’s system of public service broadcasting and the wider creative economy”.
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She wrote that the channel was currently hampered because while the majority of its funding comes from “linear TV advertising revenue which is in long-term decline”, it was prevented by legislation from producing more of its own content which could help it save money.
Under its unique business model, designed to support independent production companies, the channel is prevented from owning its content and, for example, selling it overseas.
Donelan said the government would also considering lifting the channel’s £200 million borrowing limit.The letter states that Channel 4 had agreed to move more of its operations outside of London with an increase in the number of jobs outside the capital from 300 to 600 by 2025.
The government originally launched a consultation into the channel’s future in 2021, when Oliver Dowden was the culture secretary.
Following the consultation, he said in July last year that the “broadcasting landscape has changed beyond recognition” from 1982 when the channel was launched. Its only competition then were two BBC channels and a single ITV one.
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Dowden had added that the government’s view was that a “new ownership model … would be 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”.
He said a “new owner could bring access and benefits, including access to capital, to strategic partnerships and to the international markets”.
The channel acknowledges its need to “adapt and change” in the face of increased competition in the advertising market from streaming companies such as Netflix.
Dorries firmly backed privatisation during her tenure as culture secretary from September 2021 to September 2022 but was forced to deny repeatedly that the government’s position was motivated by the channel’s perceived left-wing bias, particularly on its flagship news programme.
Conservative MPs as well as the shadow culture secretary, Lucy Powell, welcomed the government’s U-turn.
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Powell said the “Conservatives’ vendetta against Channel 4 was always wrong for Britain, growth in our creative economy and a complete waste of everyone’s time”.
Simon Hoare, the Conservative MP for North Dorset, tweeted: “A welcome and excellent decision/recommendation by @michelledonelan: if it ain’t broke; don’t fix it!”
The Liberal Democrat MP Jamie Stone welcomed the decision and said the original plans to sell the channel had been “nothing more than a culture war waged by a rash and reckless cabinet”.
