Government response
Decline in Advertising
1. Whilst it is understandable that local authorities
will want to reduce costs in the current economic climate, there
are concerns that advertising jobs on public sector portals only
was likely to limit the field of applicants to those already in
the public sector rather than the wider audience of traditional
print media. (Paragraph 9)
While this recommendation is mainly addressed to
local authorities, the Government takes the view that there should
not be a policy of publishing notifications only online. Part
of the duty when placing notices, such as job advertisements,
is that they are effective in reaching their target population.
The Government recognises that online can be a good
and effective means for accessing information, but individual
bodies are also expected to place notifications, such as job advertisements,
by other appropriate means, if necessary.
2. We are concerned at suggestions of a move to
publish public notices on public sector portals whilst broadband
take-up remains relatively low in some areas of Scotland. We would
ask the Convention of Scottish Local Authorities and the Scottish
Executive to produce evidence that substantial parts of the population
would not be excluded before removing public notices entirely
from print media. (Paragraph 10)
As above, the Government's view is that there should
not be a policy of publishing public notices only online. While
notifying bodies have a duty to be efficient, they must also use
appropriate means to reach their target audience, and should not
adopt a policy of publishing online simply to save money.
The Communications Market Report, published by Ofcom,
on 6 August 2009 noted that the proportion of households in Scotland
with a broadband connection increased from 53% in Q1 2008 to 60%
in Q1 2009, compared with 68% across the UK as a whole. It should
be noted that while broadband is, in general terms, a great benefit
for its users and the economy, it is not strictly required to
access online-published notifications, or job advertisements.
Wellbeing of newspaper staff
3. We are concerned at the reported levels of
stress in the current press industry and we welcome the Johnston
Press's commitment to act upon the results of the health and safety
audit made by the National Union of Journalists. We would urge
the National Union of Journalists to share the results of the
audit with the management of all Scottish newspaper groups as
soon as possible to enable those groups to respond with an action
plan to tackle the problems highlighted by the audit. (Paragraph
14).
This recommendation is a matter for the press industry.
Effect of the current situation on the industry
4. We note the concerns that have been raised
that the restructuring of the industry may have put at risk the
Scottish press industry's ability to deliver the high level of
quality of journalism that the public has grown to expect and
that is necessary to properly scrutinise local and regional affairs.
(Paragraph 26).
This is ultimately a matter for the press industry,
however your Report does reference the final reports of Digital
Britain and the Review of local and regional media merger regime.
In respect of the regional and local online and offline
press, the Interim Digital Britain Report invited the OFT, in
conjunction with Ofcom to review the operation of the newspaper
media mergers regime.
During that Review, there were representations from
industry and others that regional and local newspapers are in
crisis. Structural changes brought about by the advent of the
Internet, coming together with the economic challenges of the
current international climate, have created very significant changes
in the markets in which local and regional titles have operated.
The OFT's conclusions, published in parallel with
the Final Digital Britain report, acknowledge the very significant
structural and cyclical changes facing local and regional media.
The OFT set out a number of clarifications to the operation of
the regime which should be helpful to the sector and propose to
amend its guidance to ensure a new Local Media Assessment, conducted
by Ofcom, takes place in cases relating to local media mergers
involving one or more local or regional newspapers which raise
prima facie competition concerns.
Representations were made to the OFT that the media
public interest provisions should be altered, for example to include
the need for 'independent investigative journalism' as a consideration.
The review notes that public interest considerations have never
so far been used in respect to regional or local press mergers,
but the OFT recommends that BIS should consider these representations,
as well as take account of the ongoing Ofcom review of Media Ownership
Rules.
The Government has discussed this point about the
public interest test with the OFT and Ofcom. The Government has
concluded that the existing framework provides an adequate mechanism
for considering the importance of having a source of independent
news and reporting at a local and regional level across the UK.
At the most basic level the competition authorities' guidance
suggests it is unlikely that they would reach a finding of a substantial
lessening of competition (SLC) in a situation where, in the absence
of a specific proposed merger, the last remaining title or titles
in an area would close. This should protect communities against
the risk of losing their independent reporting voice as a result
of the merger control process.
The Communications Act 2003 requires Ofcom to conduct
a statutory review of the media ownership rules every three years.
Ofcom are now undertaking such a review and are expected to report
back later this year.
The Government has asked Ofcom in this current review
to consider specifically the impact of the current local ownership
rules on the longer term sustainability of the local media market.
The media ownership rules are a layer of constraint over and above
the competition rules set out in the media mergers regime. The
Government believes that an arguable case could now be made for
greater flexibility in the local radio and cross-media ownership
rules to support consolidation of local media groups which taken
together would allow for greater economies of scale and a sustainable
local voice alongside that of the BBC. For example, a local radio
station and local newspaper could consolidate and share news gathering
resources, reduce overheads and help build local brands through
cross-promotion.
The Government looks forward to the evidence based
recommendations from Ofcom's review and stands ready to bring
forward an Order to give effect to any necessary changes to the
local media ownership rules.
Independently funded News Consortia
The Digital Britain Report also set out proposals
to create independently funded news consortia to ensure continued
high quality independent nations, local and regional news in addition
to the BBC's provision.
The Report says the Government intends to pilot IFNCs
in Scotland, Wales and one English region. The emphasis will be
on quality and independence. Such consortia will be more than
just a replacement for regional television news. However, while
multiplatform news will be a crucial feature, it makes sense to
continue to take advantage of the Channel 3 licence schedule for
news across each nation, locally and regionally to build on the
existing reach and scale of access to audiences.
The Government is currently consulting on funding
options which also looks at the possibility of a contained contestable
element of the television licence fee to fund IFNCs in the longer
term. This consultation closes at the end of September.
Conclusion
5. We conclude that the Scottish newspaper industry
is an integral part of Scottish culture which is highly valued
both by its readers and by the institutions that it scrutinises.
Under pressure from the current economic climate, diminishing
advertising revenues and the explosion of alternative news and
information sources in electronic format, the industry has been
forced to dramatically restructure itself, often at great cost
to its dedicated and knowledgeable staff. It is vital that both
the Scottish Executive and the UK Government ensure that the Scottish
newspaper industry is not made unviable through overbearing competition
from public sector advertising, and that the industry is able
to adapt itself to create sustainable business models, through
consolidation and mergers subject to appropriate safeguards, whilst
maintaining high quality, varied and independent journalism that
reflects the Scottish identity. (Paragraph 29)
The Government's view is that the provision of news
content needs to reflect changing consumer patterns, and that
people must be able to access news in a variety of ways such as
on the web and by mobile phone, as well as in print.
Maintaining varied and independent journalism to
provide high quality news content that reflects the Scottish identity
is a high priority.
Scotland Office
September 2009
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