Government abandons Channel 4 privatisation in U-turn on Boris Johnson pledge

The Government is to abandon the privatisation of Channel 4, saying there are more effective ways to preserve the broadcaster’s future, in a reversal of one of Boris Johnson’s flagship policies.

In a leaked letter to the Prime Minister, Culture Secretary, Michelle Donelan, said a Department of Digital, Culture, Media and Sport (DCMS) review of the policy, which sparked widespread opposition from the television industry and Conservative backbenchers, had concluded that selling off Channel 4 was no longer the “right decision”.

Whilst welcomed by many Tory MPs, the privatisation reversal was condemned by former culture secretary, Nadine Dorries, who led the sale plans.

She said it “will now be almost impossible to face the electorate at a GE (general election) and expect voters to believe or trust our manifesto commitments”.

Instead of being privatised, Channel 4 will have the freedom to make and sell more of its own programmes as well as commissioning shows from independent producers.

The letter, revealed by Global’s The News Agents podcast, said the broadcaster must also double the number of jobs it moves to outside London from 300 to 600, a requirement which may involve the sale of its £100m HQ in Victoria.

Channel 4 has been state-owned since it was founded in 1982. It is funded by selling advertising and reinvests all its profits back into making new programmes.

Ms Donelan said Channel 4 must still face the issue of declining revenues from linear TV advertising and will be required to come up with a plan to increase revenues from other sources.

Ms Donelan, who took over as culture secretary in September, told MPs she had been talking through alternative business models with the broadcaster. A formal announcement is expected this week.

Unlike other broadcasters, everything Channel 4 airs is commissioned from external production companies.

Ms Dorries had said selling off Channel 4 was the only way to preserve its long-term future.

She hit out at the proposed U-turn, tweeting: “Three years of a progressive Tory government being washed down the drain”.

“Levelling up, dumped. Social care reform, dumped. Keeping young and vulnerable people safe online, watered down. A bonfire of EU leg, not happening. Sale of C4 giving back £2b reversed. Replaced with what?”

“A policy at some time in the future to teach maths for longer with teachers we don’t yet even have to do so. Where is the mandate- who voted for this?”

“Will now be almost impossible to face the electorate at a GE and expect voters to believe or trust our manifesto commitments.”

In her letter to Rishi Sunak, Ms Donelan noted the “view of my predecessor” was that selling C4C (Channel 4 Corporation) was the “right solution” to issues around its long-term sustainability, but that she had come to the opposite conclusion after “reviewing the business case”.

She said she planned to announce a new package of measures to “help tackle” the challenges C4C will face in the “evolving media sector”.

These could include a new statutory duty on the board to have a “clear focus” on the long-term sustainability of the business, and giving C4C more commercial flexibility.

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Ms Donelan, who was appointed by Liz Truss and remained in the role after Mr Sunak took over as Prime Minister, had previously cast doubt on plans to privatise the broadcaster.

She said she was re-examining the “business case” to make sure “we still agree with that decision”.

When the Government announced plans last year to take the channel out of public ownership, it said it was so the broadcaster can better survive in a media landscape dominated by the likes of Netflix and Amazon.

Simon Hoare, Conservative MP for North Dorset, tweeted: “A welcome and excellent decision/recommendation by @michelledonelan: if it ain’t broke; don’t fix it!”

Stephen Hammond, Conservative MP for Wimbledon, added: “I welcome the reports that C4 will not be privatised. I have always thought that its commercial future can be more sustainably secured by a new mandate within the current model.

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“This decision will ensure the independent UK production industry will continue to thrive and prosper.”

Lucy Powell MP, Labour’s shadow Culture Secretary, said: “The Conservatives’ vendetta against Channel 4 was always wrong for Britain, growth in our creative economy, and a complete waste of everyone’s time.

“Our broadcasting and creative industries lead the world, yet this Government has hamstrung them for the last year with the total distraction of Channel 4 privatisation.”

A DCMS spokesman said: “We do not comment on speculation. The DCMS secretary of state has been clear that we are looking again at the business case for the sale of Channel 4. We will announce more on our plans in due course.”