In a wide-ranging report, the Cairncross Review into the future of the UK news industry called for ministers to look at new tax breaks for “public interest” journalism, with direct funding for local public interest news.
It recommended the creation of a new institute of public interest news, along the lines of the Arts Council, to channel a combination of public and private finance into those parts of the industry deemed most worthy of support.
Culture Secretary Jeremy Wright welcomed the review’s findings, saying that while some could be acted on immediately, others would require “further careful consideration” with interested parties on the way forward.
The review, chaired by former senior journalist and academic Dame Frances Cairncross, was commissioned by Theresa May to investigate the sustainability of quality journalism in the face of declining newspaper sales and falling revenues.
It concluded that after evidence of “market failure” in the supply of public interest news, Government intervention may be the only solution.
The review noted that investigative journalism and “democracy reporting” – such as local courts and councils – were the areas under the greatest threat, as they rarely paid for themselves.
It said that the power of online platforms like Google and Facebook captured the majority of online advertising revenues, making it hard for traditional publishers, such as newspapers, to compete effectively.
In order to create a “level playing field”, it called for the creation of new codes of conduct, overseen by a regulator, to “re-balance” the relationship.
These could include commitments by the platforms not to impose their own advertising software on news publishers, “transparent” terms in relation to shares of online advertising revenues and a pledge to work “collaboratively” on how news content is presented.
“A healthy democracy needs high quality journalism to thrive and this report sets out the challenges to putting our news media on a stronger and more sustainable footing, in the face of changing technology and rising disinformation.”
Culture secretary, Jeremy Wright
The review said the Government should place an obligation on the larger platforms to improve how users understand the origin of news articles and the trustworthiness of their sources, so helping their readers better understand what “good” or “quality” news looks like.
“While each platform should devise solutions which best fit the needs of their particular users, their efforts should be placed under regulatory scrutiny – this task is too important to leave entirely to the judgment of commercial entities,” the review said.
“If it becomes clear that efforts have not increased the reach of high-quality news, or had a measurable impact on the quality of people’s engagement with online news, it may be necessary to impose stricter provisions.”
The review also called on the Government to consider new forms of tax relief to ensure an “adequate supply” of public interest journalism, including extending the zero VAT rating for printed newspapers to online newspapers and magazines.
It said ministers should establish a new innovations fund aimed at improving the supply of public interest news – to be run eventually by the proposed institute of public interest news – while expanding direct funding for local journalism through the Local Democracy Reporting Service, currently run by the BBC.
It said media regulator Ofcom should assess the market impact of BBC News Online on the sector and whether it was striking the right balance in aiming for the widest reach for its own content and driving traffic to other local news providers.
The review also called on the Competition and Markets Authority to investigate the workings of the online advertising market to ensure fair competition and for Ofcom to work with the Government on developing a “media literacy strategy”.
Dame Frances said: “The proposals I have put forward have the potential to improve the outlook for high quality journalism.
“They are designed to encourage new models to emerge, with the help of innovation not just in technology but in business systems and journalistic techniques.”