BBC offers STV a licence-fee lifeline for local news bulletins – but falling ad revenues force a cut in hours

Published on Tuesday 16 June 2009 22:44

A LIFELINE has been thrown to STV to let it to continue to produce alternative news coverage to the BBC in Scotland – by allowing it to compete for funds raised by the licence fee.

STV currently spends around 7 million a year providing TV bulletins for its two regions covering central and north Scotland.

But it has been forced to cut back its coverage from five hours 20 minutes a week to four hours as a result of a fall in advertising revenue brought on by the recession.

Scotland was announced yesterday as one of three UK TV regions where a three-year pilot would be run by using up to 5m a year of cash – being raised via the licence fee for the digital switchover, a large amount of which is underspent – to subsidise national news.

However, there is confusion about how this will work in practice. STV believes that, if it wins the contract, expected to begin in 2010, then it will make its news bulletins available to other TV stations and rival websites.

However, a UK government source told The Scotsman that the pilot would enable rival news outlets to bid to produce the news that goes out on STV.

Bobby Hain, managing director of broadcasting at STV, told The Scotsman: "We are very pleased that the Digital Britain report recognises the value of STV news to viewers in Scotland and lays out a pathway of safeguarding that news by introducing public funding.

"We have been campaigning for that and we are very pleased that our voice has been heard by the regulator and the government."

STV was also granted greater freedom to accept commissions from other broadcasters to produce TV programmes. Mr Hain said this would boost TV production north of the Border.

Jim Murphy, the Scottish Secretary, said: "Local news is an integral part of the broadcasting mix in Scotland and the lifeline which will be extended to STV – and which will allow it to sell programmes as an independent producer – means we will continue to see Scottish news from both the BBC and STV in Scotland and a thriving creative and production sector."

Labour MP David Cairns, chair of the all-party group on Scottish broadcasting, said the proposals would ensure competition for BBC Scotland, provide other sources of funding for STV and increase the number of programmes made in Scotland.

He said: "This report clears the way for financial support to come from the TV licence fee for other providers of Scottish news such as STV.

"The government recognises how critical this is in Scotland by making us one of the pilot areas for this radical new proposal.

"All in all this is a good report for the broadcasting industry in Scotland, but more importantly it is excellent news for Scottish viewers."