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Government outlines reforms to Channel 4, including no cap on in-house production

Photo: the top of Channel 4's HQ building in Leeds – a modern glass structure built on top of a traditional stone building with statues. Blue sky above.

The Government has today (Wednesday 8th November 2023) set out how it plans to proceed with its reform of Channel 4, including the parameters under which any in-house production will operate.

Measures announced include requiring Ofcom to review the impact of Channel 4 developing its own production capability, should they choose to do so, and providing a new statutory role for Ofcom to oversee the measures Channel 4 puts in place to ensure open and fair access to its commissions. 

Since the beginning of the year, Pact has worked to convince the Government to consider a regulatory system - similar to that of BBC Studios - to ensure more transparency around how a new production arm will operate in the market.

We are therefore pleased that Government has backed our calls for the new Channel 4 arms-length commercial subsidiary to be properly regulated independently by Ofcom, and the Government’s proposal that Ofcom will in future be required to report on how Channel 4’s production arm is operating in the market in its regular review of UK Public Service Broadcasting. 

Pact is also pleased that the current 50% Out of London quota will be committed to by Channel 4 Corporation, ensuring that any changes to this voluntary quota would have a higher threshold to satisfy, and we welcome the proposed increase of the indie quota from 25% to 35% also announced today.

Pact welcomes the fact that Government has listened to many of our proposals to ensure the regulation of Channel 4’s commercial production arm. However, we would call on Channel 4 to carefully consider any move into in-house production given the current difficult market conditions.
John McVay OBE
Pact Chief Executive

However, we are disappointed that Government has decided not to cap how much in-house production the new subsidiary of the broadcaster could win, which Pact had proposed it should do.

The Government has also confirmed that it will no longer pursue plans to change the definition of an indie producer, which would have potentially damaged investment in the sector and created an additional burden on both independent producers and commissioning broadcasters.

Media Bill introduced in Parliament

The proposed reforms to Channel 4 make up part of the Government’s Media Bill, which had its first reading in the Commons today. As well as the changes to Channel 4, the Bill includes an update to the rules around prominence for UK broadcasters, and regulation of streaming services. 

The Bill will progress to second reading, which is the first opportunity to debate the main principles. As it progresses through the House of Commons and the Lords, MPs and Lords may be able to propose amendments. The Bill must be approved in the same form by both Houses before becoming an Act (law).

We will continue to keep members updated on the passage of the Bill.