Channel 4 privatisation plans formally abandoned by culture secretary

The government has scrapped plans to privatise Channel 4 with an “ambitious package of measures” to serve as an alternative to the sale. Former Culture Secretary Nadine Dorries spearheaded the proposal to take the broadcaster out of public ownership during Boris Johnson’s premiership. But her successor Michelle Donelan confirmed on Thursday that the process has been halted following discussions with Channel 4 and the independent production sector.

Welcoming the news, Channel 4 said the decision "allows us to be even more of a power in the digital world".

"This decision provides a firm basis on which to establish the sustainable direction of Channel 4, safely in the hands of the British people," a statement read.

Ms Donelan said she had reached her decision "after reviewing the business case and engaging with the relevant sectors".

Why did the government want to privatise the broadcaster? The government previously argued Channel 4’s long-term future needed to be secured amid concerns for its survival in the streaming era. Ms Dorries had said she wanted the broadcaster to remain a “cherished place in British life”, but felt Government ownership was “holding Channel 4 back from competing against streaming giants like Netflix and Amazon”. The government also argued a sale could allow the channel, which has limited ability to borrow money or raise private sector capital to invest in new platforms and products and cannot own and sell its own content, to establish its own production house and generate its own intellectual property.

No price tag was officially set by the government but reports suggested the channel could be sold for as much as £1 billion.

Channel 4, which was founded in 1982 to deliver to under-served audiences, is currently owned by the government. It receives its funding from advertising, not from the taxpayer. Unlike other broadcasters, everything it airs is commissioned from external production companies.

In his leadership campaign earlier this year, Prime Minister Rishi Sunak said he would continue with the privatisation plan, but he has now accepted Ms Donelan's decision to axe it.

The newly-announced alternative package includes reforms through the Media Bill which will allow Channel 4 to make and own some of its content and a new statutory duty on the board to “protect” the long-term financial sustainability of the business.

The broadcaster has also committed to increasing roles outside London and providing more opportunities for people from across the UK to gain experience in the sector as part of the package, the DCMS announced. In a statement, Ms Donelan said: “This announcement will bring huge opportunities across the UK with Channel 4’s commitment to double their skills investment to £10 million and double the number of jobs outside of London. “The package will also safeguard the future of our world leading independent production sector. We will work closely with them to add new protections such as increasing the amount of content C4C must commission from independent producers.”

Channel 4’s chief executive Alex Mahon said the decision would allow the broadcaster to be “even more of a power in the digital world”.

However, the conclusion was not welcomed by all, with Ms Dorries launching a bitter attack on the PM after the plans were leaked on Wednesday.

The Tory MP accused Mr Sunak of U-turning or abandoning key parts of Mr Johnson’s agenda, as she warned it would now be “almost impossible to face the electorate” at the next general election.

Meanwhile, Labour’s shadow culture secretary Lucy 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.

“Our broadcasting and creative industries lead the world, yet this government has hamstrung them with this total distraction.”

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