Plans to privatise Channel 4 have been formally abandoned, ending years of threats to the broadcaster that cost the government millions of pounds and were opposed by the vast majority of the media industry.
The culture secretary, Michelle Donelan, said Channel 4 was a “British success story and a linchpin of our booming creative industries” and therefore should not be sold. Instead, she is suggesting a relative modest series of tweaks to Channel 4’s remit, with the business continuing to be owned by the state.
Donelan’s decision reverses proposals set out at length by her predecessor Nadine Dorries, under Boris Johnson’s government, which would have seen Channel 4 sold to a private owner. There had been suggestions, including from Tory MPs, that the proposed sale was motivated by political opposition to Channel 4’s output rather than a sound business case.
Rather than sell the broadcaster, the government will allow it to borrow more money and enable it to make programmes in-house. Channel 4 has also pledged to invest an extra £5m in skills training, and boost spending in regional bases such as Leeds, Bristol and Glasgow. The broadcaster said it will also double the number of staff based outside London to 600, meaning about half of its workforce will ultimately be based outside the capital. However, a spokesperson said the company did not intend to forcibly relocate any more roles.
Channel 4 is owned by the state but funded commercially, mainly through television advertising. Unlike other broadcasters such as ITV, Channel 4 is required to reinvest its profits into making distinctive programmes – and is banned from making its own shows, meaning it has to commission them from external businesses.
However, there are concerns about government proposals to allow Channel 4 to make its own programmes for the first time in its 40-year history, a move that could hit smaller independent production companies across the UK. The government said this would give Channel 4 “greater ability to produce and monetise its own content”, but sources at the broadcaster said they had not requested this change and were unsure how it would work.
Pact, the trade body that represents British television production companies, said: “Any relaxation of Channel 4’s publisher-broadcaster status will be a blow to the sector, who are already facing increased production and business related costs.”
The official confirmation that the government will abandon Channel 4 privatisation followed a leaked preliminary decision published on Wednesday, which drew to an end years of debate over selling the channel. Previous proposals to privatise Channel 4 have also floundered over the years.
Channel 4 said: “We welcome the government’s decision that Channel 4 will remain in public ownership. This decision provides a firm basis on which to establish the sustainable direction of Channel 4, safely in the hands of the British people.”
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The pledge to increase staffing levels outside the capital will once again raise questions over the future of Channel 4’s Horseferry Roads headquarters, situated close to the Houses of Parliament and valued at about £100m. At the moment there is no plan to sell the building.
Despite securing its ownership status, Channel 4 still faces substantial challenges as it continues to be heavily reliant on television advertising income at a time when traditional viewing is collapsing. It has promised to focus on growing its advertising-supported streaming service, currently called All 4 but soon to be rebranded simply as Channel 4.
The latest plans to privatise Channel 4 were hatched in the aftermath of the Conservatives’ 2019 general election victory, when the government briefed that it wanted to take on the media on several fronts. Although ministers exerted pressure on the BBC and froze the licence fee, government chaos and strong political opposition meant it failed in other aspects of its war on the media, such as installing the former Daily Mail editor Paul Dacre as the chair of the regulator Ofcom.
