Ofcom to consider Channel 4's funding model

Ofcom has concluded that there is no "immediate insurmountable pressure" on Channel 4's financial situation, but it will consider the options for medium to long term support, which would be evaluated for the period between 2011 and 2012.

This comes in response to independent analysis by LEK Consulting, which showed that Channel 4's funding model is unlikely to be sustainable in the mid to long term.

Ofcom said it "would work with Channel 4 to monitor the impact of financial pressures over the next few years."

The regulator also says it wants the Channel 4 board to develop the ways in which it assesses the broadcaster’s remit delivery and public service contribution ahead of this period of financial uncertainty.

Ed Richards, Ofcom chief executive, said Channel 4 must not fall into "the trap" of distinguishing purely between commercial and unprofitable, public service programming.

Richards added that while the Celebrity Big Brother race row had put a spotlght on Channel 4's remit, he called it "a single incident we dealt with" and urged industry to take long term perspective.

He said: "We have to make sure we balance accountability with a regime that ensures Channel 4 has freedom to make creative programme and that the responsibility for remit delivery remains with the Channel 4 board."

Channel 4 has responded to Ofcom's announcement, with chief executive, Andy Duncan, saying: "Today's statement ends the debate about whether or not Channel 4 is going to face future funding problems and we can now begin focusing on how to address them. Ofcom acknowledges that if Channel 4 is going to continue to provide vital public service competition to the BBC, then it is likely to require new forms of public support."