Ofcom warns of regional news shortfall

Ofcom has today warned that ITV licence holders around the UK could face a crippling funding shortfall by 2012, and also backed radical change in regional news provision.

According to calculations by the regulator, the 15 ITV regional network licences around the UK - including STV and UTV - could have a collective funding deficit of between £38m and £64m by the end of the digital switchover in 2012.

Responding to a Department for Culture, Media and Sport consultation, the watchdog also reiterated its backing for a government proposal that independent local news consortia should deliver ITV regional news in England, Scotland, Wales and Northern Ireland.

Initially put forward in the Digital Britain report, the news consortiums would be funded by the £130 shortfall in the licence fee from underspend on the Digital Switchover Help Scheme.

The government is spearheading the proposal because of a desire to foster a viable regional news alternative to the BBC's coverage, although the corporation strongly opposes the idea.

Exactly how the consortiums will be structured is not yet known, but it is thought that other media firms such as newspapers would get involved in the provision of broadcaster news.

Pilot schemes for the approach are due to commence next year in Wales, England and Scotland. STV, ITV's licence holder in Scotland, has broadly welcomed the proposal.

Along with STV, other potentially interested parties for the scheme may include the Guardian Media Group, ITN, DC Thompson, Johnston Press, Newsquest and production company Ten Alps.

Back in July, Ofcom also announced that the rules governing cross-media ownership would be relaxed to enable companies to own combinations of local radio stations, newspapers and TV licenses in one area.